THE RACE FOR RARE EARTH

A Chinese-owned rare earth mining project sprawls across Perak, Malaysia. Known as MCRE Resources, this site became operational in 2022 and is Malaysia’s largest legal rare earth mine. Expansion is underway to quadruple its size to 1,360 acres, signa

A Chinese-owned rare earth mining project sprawls across Perak, Malaysia. Known as MCRE Resources, this site became operational in 2022 and is Malaysia’s largest legal rare earth mine. Expansion is underway to quadruple its size to 1,360 acres, signaling the country’s growing role in this critical global industry.

The Sungai Perak, providing 45% of the state’s water, flows near MCRE and several illegal mining sites. Environmental advocates fear contamination, as ammonium sulfate from mining leaches into groundwater, potentially impacting this vital resource.

The Sungai Perak, providing 45% of the state’s water, flows near MCRE and several illegal mining sites. Environmental advocates fear contamination, as ammonium sulfate from mining leaches into groundwater, potentially impacting this vital resource.

With China producing 70% of rare earths and refining nearly 90%, nations like the U.S. and Japan are racing to secure alternative sources. Geopolitical tensions are accelerating efforts to diversify supply chains for these indispensable materials.

With China producing 70% of rare earths and refining nearly 90%, nations like the U.S. and Japan are racing to secure alternative sources. Geopolitical tensions are accelerating efforts to diversify supply chains for these indispensable materials.

A Chinese cemetery expands near the Mukim Belanja Repository, where radioactive waste from earlier rare earth mining operations was buried. This quiet site remains a stark reminder of the human cost of Malaysia’s mining history.

A Chinese cemetery expands near the Mukim Belanja Repository, where radioactive waste from earlier rare earth mining operations was buried. This quiet site remains a stark reminder of the human cost of Malaysia’s mining history.

Rare earth extraction at MCRE relies on in-situ leaching (ISL), a method developed in China. By injecting ammonium sulfate into the earth, the process dissolves minerals underground, which are then collected in downhill evaporation ponds for refineme

Rare earth extraction at MCRE relies on in-situ leaching (ISL), a method developed in China. By injecting ammonium sulfate into the earth, the process dissolves minerals underground, which are then collected in downhill evaporation ponds for refinement. ISL avoids large-scale deforestation but poses a significant risk of groundwater contamination, as the chemicals used can seep into surrounding basins.

Beneath Malaysia’s dense forest canopies, illegal rare earth miners operate covertly. Makeshift leaching ponds, lined with sandbags and plastic sheets, facilitate the extraction of minerals while eluding authorities.

Beneath Malaysia’s dense forest canopies, illegal rare earth miners operate covertly. Makeshift leaching ponds, lined with sandbags and plastic sheets, facilitate the extraction of minerals while eluding authorities.

As the global economy transitions to clean energy, demand for rare earth elements is projected to soar. Valued at $3.74 billion in 2024, the market is expected to reach $8.14 billion by 2032, growing at a compound annual rate of 10.2%.

As the global economy transitions to clean energy, demand for rare earth elements is projected to soar. Valued at $3.74 billion in 2024, the market is expected to reach $8.14 billion by 2032, growing at a compound annual rate of 10.2%.

In 2023, Malaysia officially produced 6,800 metric tons of rare earths, comprising 1.94% of global output. However, illicit mining is estimated to add 16,000 tons annually, boosting the country’s share to 6.8%—on par with Australia and the United Sta

In 2023, Malaysia officially produced 6,800 metric tons of rare earths, comprising 1.94% of global output. However, illicit mining is estimated to add 16,000 tons annually, boosting the country’s share to 6.8%—on par with Australia and the United States.

Rare earth elements are critical for renewable energy, from powering wind turbines to driving electric vehicles. These minerals also underpin advancements in consumer electronics and defense technologies, making their supply vital for global innovati

Rare earth elements are critical for renewable energy, from powering wind turbines to driving electric vehicles. These minerals also underpin advancements in consumer electronics and defense technologies, making their supply vital for global innovation.

Plantation land, now owned by MCRE, and earmarked for its expansion from 340 acres to 1,360 acres. Known as MCRE Resources, this site became operational in 2022 and is Malaysia’s largest legal rare earth mine.

Plantation land, now owned by MCRE, and earmarked for its expansion from 340 acres to 1,360 acres. Known as MCRE Resources, this site became operational in 2022 and is Malaysia’s largest legal rare earth mine.

An illegal mining site in the jungle near Lawin, Malaysia, was operated through collusion between a local businessman and the state police chief. Authorities raided the operation in 2022, arresting 31 workers, including migrants from Myanmar and Bang

An illegal mining site in the jungle near Lawin, Malaysia, was operated through collusion between a local businessman and the state police chief. Authorities raided the operation in 2022, arresting 31 workers, including migrants from Myanmar and Bangladesh.

Sand dredging on the banks of the rivers inside MCRE's expansion zone, used for construction.

Sand dredging on the banks of the rivers inside MCRE's expansion zone, used for construction.

A 2023 report by the World Wide Fund for Nature (WWF) revealed that mining activities, including rare earth extraction, are responsible for up to one-third of deforestation in global forest ecosystems when indirect impacts are considered.

A 2023 report by the World Wide Fund for Nature (WWF) revealed that mining activities, including rare earth extraction, are responsible for up to one-third of deforestation in global forest ecosystems when indirect impacts are considered.

In the 1980s, radioactive waste from the Asian Rare Earth mining operation triggered a public health crisis in the town of Papan, with leukemia rates and child deformities surging. The disaster led to a mass exodus and eventually the construction of

In the 1980s, radioactive waste from the Asian Rare Earth mining operation triggered a public health crisis in the town of Papan, with leukemia rates and child deformities surging. The disaster led to a mass exodus and eventually the construction of the Mukim Belanja Repository, where radioactive waste remains sealed beneath concrete to this day.

Beneath Malaysia’s dense forest canopies, illegal rare earth miners operate covertly. Makeshift leaching ponds, lined with sandbags and plastic sheets, facilitate the extraction of minerals while eluding authorities.

Beneath Malaysia’s dense forest canopies, illegal rare earth miners operate covertly. Makeshift leaching ponds, lined with sandbags and plastic sheets, facilitate the extraction of minerals while eluding authorities.

Malaysia refines 10% of the world’s rare earth oxides, making it a key player in the global supply chain. The Lynas Advanced Materials Plant in Gebeng, Pahang, processes Australian concentrates, highlighting the nation’s strategic importance in rare

Malaysia refines 10% of the world’s rare earth oxides, making it a key player in the global supply chain. The Lynas Advanced Materials Plant in Gebeng, Pahang, processes Australian concentrates, highlighting the nation’s strategic importance in rare earth processing.

An irrigation pond on plantation land, now owned by MCRE, and earmarked for its expansion from 340 acres to 1,360 acres. Known as MCRE Resources, this site became operational in 2022 and is Malaysia’s largest legal rare earth mine.

An irrigation pond on plantation land, now owned by MCRE, and earmarked for its expansion from 340 acres to 1,360 acres. Known as MCRE Resources, this site became operational in 2022 and is Malaysia’s largest legal rare earth mine.

In the 1980s, radioactive waste from the Asian Rare Earth mining operation triggered a public health crisis in the town of Papan, with leukemia rates and child deformities surging. The disaster led to a mass exodus and eventually the construction of

In the 1980s, radioactive waste from the Asian Rare Earth mining operation triggered a public health crisis in the town of Papan, with leukemia rates and child deformities surging. The disaster led to a mass exodus and eventually the construction of the Mukim Belanja Repository, where radioactive waste remains sealed beneath concrete to this day.

Plantation land, now owned by MCRE, and earmarked for its expansion from 340 acres to 1,360 acres. Known as MCRE Resources, this site became operational in 2022 and is Malaysia’s largest legal rare earth mine.

Plantation land, now owned by MCRE, and earmarked for its expansion from 340 acres to 1,360 acres. Known as MCRE Resources, this site became operational in 2022 and is Malaysia’s largest legal rare earth mine.

In southern China, long-term studies reveal that ISL mining contaminates rivers and groundwater with nitrogen and other pollutants—effects that linger a decade after mining ends. Similar concerns loom over Malaysia’s growing reliance on this method.

In southern China, long-term studies reveal that ISL mining contaminates rivers and groundwater with nitrogen and other pollutants—effects that linger a decade after mining ends. Similar concerns loom over Malaysia’s growing reliance on this method.

Illegal rare earth mining in Malaysia distorts global markets, devastates ecosystems, and complicates trade relations. With exports rivaling official production, these operations undermine efforts to regulate and sustain the industry.

Illegal rare earth mining in Malaysia distorts global markets, devastates ecosystems, and complicates trade relations. With exports rivaling official production, these operations undermine efforts to regulate and sustain the industry.

Rare earth extraction at MCRE relies on in-situ leaching (ISL), a method developed in China. By injecting ammonium sulfate into the earth, the process dissolves minerals underground, which are then collected in downhill evaporation ponds for refineme

Rare earth extraction at MCRE relies on in-situ leaching (ISL), a method developed in China. By injecting ammonium sulfate into the earth, the process dissolves minerals underground, which are then collected in downhill evaporation ponds for refinement. ISL avoids large-scale deforestation but poses a significant risk of groundwater contamination, as the chemicals used can seep into surrounding basins.

While ISL mining is less invasive than traditional open-pit methods, it introduces challenges in containing groundwater pollution. In Perak, ammonium sulfate used in the process threatens to infiltrate local waterways, raising alarms among environmen

While ISL mining is less invasive than traditional open-pit methods, it introduces challenges in containing groundwater pollution. In Perak, ammonium sulfate used in the process threatens to infiltrate local waterways, raising alarms among environmental advocates and communities downstream.

The Mukim Belanja Repository, where radioactive waste from earlier rare earth mining operations was buried. This quiet site remains a stark reminder of the human cost of Malaysia’s mining history.

The Mukim Belanja Repository, where radioactive waste from earlier rare earth mining operations was buried. This quiet site remains a stark reminder of the human cost of Malaysia’s mining history.

Rare earth elements, a group of 17 metals critical for manufacturing high-performance magnets, batteries, and components used in renewable energy systems, electric vehicles, advanced electronics, and weapons technology, are indispensable to modern life. As global demand for these materials surges—fueled by the transition to clean energy and decarbonization—the world must confront an uncomfortable truth: China dominates the industry, producing 70% of rare earths and refining 90% of the global supply.

This near-monopoly has far-reaching geopolitical implications. Western nations, wary of their reliance on Chinese-controlled supply chains, are racing to diversify sources. The United States, Japan, and the European Union are investing heavily in mining and processing projects worldwide. The EU recently announced ambitious targets for securing sustainable supplies of rare earths, while the UK explores partnerships with nations like Australia to reduce dependence on China.

Yet diversifying supply chains is fraught with challenges. Pollution concerns, which drove rare earth processing out of Western countries, have consolidated the industry in China. As the market is projected to grow from $3.74 billion in 2024 to $8.14 billion by 2032, governments face a difficult choice: tolerate the environmental and social costs of local mining or remain reliant on imports from regions like Southeast Asia.

Malaysia plays a rare dual role in the global rare earth supply chain. In 2023, the country produced 6,800 metric tons of rare earth elements, and its processing facilities, like the Lynas Advanced Materials Plant in Pahang, refine 10% of the world’s rare earth oxides. These facilities underscore Malaysia’s importance as both a producer and processor of critical materials.

However, the country’s official production is overshadowed by an estimated 16,000 tons of rare earths mined illegally each year, placing the nation among global heavyweights like Australia and the US in terms of rare earth exports. Hidden beneath dense forest canopies, unlicensed operations evade environmental regulations, using rudimentary techniques like makeshift leaching ponds lined with sandbags and plastic sheets. These illicit activities, often linked to collusion with local authorities, distort international markets while wreaking havoc on Malaysia’s ecosystems.

Rare earth mining comes with profound environmental costs. Malaysia’s largest legal rare earth project, the MCRE Resources site in Perak, employs in-situ leaching (ISL) techniques developed in China. By injecting ammonium sulfate into the soil to dissolve minerals, ISL avoids excavation but risks severe groundwater contamination. Studies from China warn of long-lasting pollution: rivers and groundwater near ISL sites remain contaminated with nitrogen and other chemicals even a decade after mining ceases.

A 2023 report by the World Wide Fund for Nature (WWF) revealed that mining activities, including rare earth extraction, are responsible for up to one-third of deforestation in global forest ecosystems when indirect impacts are considered.

The environmental toll isn’t new to Malaysia. The legacy of radioactive waste from the 1980s Asian Rare Earth facility in Perak remains a stark reminder of the human cost of rare earth extraction. Leukemia and birth defects devastated nearby communities, and the waste, now entombed at the Mukim Belanja Repository, continues to fuel public fears of contamination.

The global transition to clean energy depends on rare earths. Strong magnets made from these elements power wind turbines and electric vehicle motors, while rare earths underpin innovations in defense and consumer electronics. 

Malaysia’s experience highlights the complexities of this trade-off. As the country quadruples legal mining operations and illegal mining proliferates, questions about accountability, sustainability, and justice remain unanswered. Western governments, eager to secure non-Chinese supplies, must reconcile their green ambitions with the environmental costs borne by resource-rich nations like Malaysia.

Without significant reforms, the race to secure rare earths risks creating new “sacrificial zones”—regions where the drive for clean energy compromises local ecosystems and communities. As global demand surges, the challenge will be to balance the need for critical materials with the ethical imperative to minimize harm.