CNN Indonesia
Tuesday, 12 Sep 2023 08:36 IWST
Malaysia will ban exports of raw materials, following what Indonesia has done in the era of President Jokowi. An export ban will apply to rare earths. (AP/Yasuyoshi Chiba).
Jakarta, CNN Indonesia —
Malaysia will prohibit the export of raw materials, following what Indonesia has done in the President’s era Jokowi. Prime Minister of Malaysia Anwar Ibrahim said the export ban would apply to rare earths.
The prohibition is imposed to avoid exploitation and loss of natural resources. This policy makes Malaysia the latest country to tighten exports of key minerals.
Anwar did not explain when the export ban would take effect. What is certain is that he said the export ban was imposed because the government wanted to support the development of the rare earth metals industry in Malaysia.
Apart from that, the ban was imposed because he wanted Malaysia to get maximum benefits from the natural resources it had. In his presentation in the Malaysian Parliament, Anwar said that if the ban was effective, the rare earth metals industry could contribute 9.5 billion ringgit or US$2 billion to Malaysia’s GDP in 2025.
Apart from that, he also predicts that this policy could create 7,000 new jobs.
“(Therefore) detailed mapping of sources of rare earth elements and a comprehensive business model that combines upstream, midstream and downstream industries will be developed to maintain the rare earth value chain in the country,” he said as quoted from ReutersTuesday (12/9).
Malaysia actually has only a small number of rare earth reserves in the world. Data from the United States Geological Survey in 2019 estimated that Malaysia’s rare earth mineral reserves were only 30 thousand metric tons.
The amount of reserves is far compared to what China has. The Bamboo Curtain country is said to have rare earth mineral reserves of 44 million tons.
China’s reserves are the largest in the world.
Although only small, some analysts said the policy could affect sales to China, which imported around 8 percent of its rare earth ore from Malaysia between January and July this year.
Not only that. The restrictions have also sparked concerns that China could also limit exports of other critical minerals including rare earth metals.
Analyst David Merriman at Project Blue said the impact of the ban in Malaysia was still unclear due to a lack of details. However, a ban on rare earth ore exports could impact Chinese companies operating in Malaysia.
“The law could have a negative impact on investment potential in Malaysia from the Chinese side, which has looked to other Asian countries to obtain unprocessed or blended rare earth compounds as raw materials for (rare earth) processing facilities in southern China, Merriman said.
The ban on raw material exports is currently also being implemented by President Jokowi. One of the prohibitions is on nickel. The ban was imposed so that the raw materials could be sourced domestically.
Jokowi claims that downstreaming provides benefits including opening job opportunities. Jokowi gave the example that nickel downstreaming in Central Sulawesi has provided employment opportunities for 71,500 workers from the previous 1,800 workers.
Then in North Maluku before downstreaming there were only 500 people working in nickel processing. However, after downstreaming it increased to 45,600 workers.
Not only in terms of employment, Jokowi said that the state also benefits from downstream value added tax (VAT), income tax (PPh), royalties and non-tax state revenue (PNBP).
(reuters/agt)
2023-09-12 01:36:20
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