The US Department of Defense signed a four-year rare earth agreement worth $96 million with Australian mining company Lynas in March, triggering protests in Malaysia where the company's main processing facility is located. Over 50 non-governmental organizations sent an open letter to Malaysian Prime Minister Anwar expressing concerns that the agreement could implicate Malaysia in violations of international law, citing the US as Israel's primary weapons supplier. China currently dominates global rare earth mining and processing, and the US seeks alternative sources for materials critical to modern industry, from smartphones and electric vehicles to advanced weapons systems.
US Department of Defense Signs $96 Million Rare Earth Agreement with Lynas
In March, the US Department of Defense signed a four-year agreement with Australian mining company Lynas to obtain rare earth materials. The agreement is valued at $96 million (approximately 84 million euros). Rare earth elements are critical for modern industry and are used in products ranging from smartphones and electric vehicles to advanced weapons systems.
Lynas operates its main processing facility in Gebeng on the east coast of Malaysia. This facility is the largest of its kind outside China.
Malaysian NGOs Send Open Letter to Prime Minister Anwar
Following news of the agreement, protests erupted in Malaysia. The country has historically supported Palestine and condemned Israeli actions in Gaza and the West Bank. Local residents urged the Kuala Lumpur government to either boycott the Lynas agreement or provide guarantees that rare earth materials produced in Gebeng would not be used in any weapons systems.
In an open letter to Malaysian Prime Minister Anwar, over 50 non-governmental organizations stated that the agreement could implicate the country in "credible allegations of violations of international law" including in the Gaza Strip. The open letter noted that the United States is Israel's primary weapons supplier.
Whether there is a connection between Malaysian rare earth materials and Israeli weapons remains unclear. The relevant materials can be used to manufacture fighter jets and missiles, as well as washing machines or wind turbines. Thomas Kruemmer, head of Singapore-based Ginger International Trade and Investment Company specializing in the rare earth market, told Deutsche Welle that "the demands of Malaysian protesters are equivalent to banning rubber exports to the United States because rubber might be used in Israeli vehicles in Gaza."
Parliamentary Committee Holds Hearing on Lynas Project
Last week, a parliamentary committee held a hearing to determine whether the Lynas project would undermine "Malaysia's reputation as a staunch supporter of Palestine." The Anwar government must now state its official position on the agreement by the end of this month.
"For Malaysians, this matter is less about rare earth elements and more about Palestine," Kruemmer said. Activists hope to use the Gebeng refinery as leverage to pressure US geopolitical considerations. China, a US adversary, currently dominates global rare earth mining and processing. Beijing has also restricted exports of related materials to the West.
Lynas Produces Critical Rare Earth Elements Dysprosium and Terbium
Kruemmer stated that Australia's Lynas is one of the few companies capable of providing commercial quantities of two special rare earth elements: dysprosium and terbium. "Since China stopped exporting rare earth elements for military use, Lynas will become the Pentagon's only currently available source."
When Lynas announced the agreement in March, it did not specify whether materials sold to the US Department of Defense would be used for weapons. Kruemmer estimated that given the Pentagon signed the agreement, the materials would likely be used in the defense sector.
Neither Lynas nor the US Department of Defense responded to Deutsche Welle's inquiries.
FAQ
What did the US Department of Defense sign with Lynas in March?
The US Department of Defense signed a four-year rare earth agreement with Australian mining company Lynas worth $96 million in March. The agreement aims to obtain rare earth materials that are critical for modern industry, including products from smartphones to advanced weapons systems.
Why are Malaysian activists protesting the Lynas agreement?
Over 50 Malaysian non-governmental organizations sent an open letter to Prime Minister Anwar expressing concerns that the agreement could implicate Malaysia in violations of international law, particularly in Gaza. The activists cite the US as Israel's primary weapons supplier and are urging the government to either boycott the agreement or guarantee that rare earth materials produced in Malaysia will not be used in weapons systems.
