Rare Earths Milestone: 10-Year Malaysia Deal Sparks European Move to Bypass Chinese Dominance

A historic rare earths milestone has been achieved in Southeast Asia, as French mining and refining specialist Carester officially signed a long-term commercial partnership with Malaysia’s Malaco Mining Sdn Bhd. The ten-year joint venture marks the first large-scale investment by a European rare earths enterprise in Malaysia, signaling a major shift in Europe’s quest to build independent green technology supply chains.

The strategic deal was announced at a press conference held at the French Embassy in Malaysia, highlighting why this rare earths milestone is seen as a major geopolitical shift. Representatives from both nations emphasized that the partnership will secure vital raw materials for premium electronics and electric vehicles.

1. Deep Dive Into the Perak Facility: A Rare Earths Milestone

Under the new ten-year strategic agreement, Carester and Malaco Mining will jointly build a state-of-the-art rare earth separation plant in the northwestern Malaysian state of Perak. Once fully operational, the facility will boast a massive annual processing capacity of approximately 13,000 metric tons of light and heavy rare earth elements.

The Perak plant will focus on refining neodymium, dysprosium, and terbium oxides, which are the fundamental raw materials required to produce high-performance permanent magnets. Because these magnets are crucial for electric vehicle motors, robotics, and wind turbines, this separation plant represents a massive rare earths milestone for the European Union’s supply chain security.

“Malaysia has some rare earth deposits. This is such a win-win partnership. We bring some technology and take some rare earths to feed our heavy rare earth facilities in France.”
— Frederic Carencotte, Carester CEO

Carester intends to ship a portion of the refined oxides back to its recycling and heavy rare earth concentration facilities in France. This cross-border feedback loop will directly supply European automakers, helping them comply with strict local environmental and sourcing regulations.

2. Clean Technology Transfer and In-Situ Leaching

In addition to refining, the joint venture is seeking permits from local authorities to deploy advanced, eco-friendly “in-situ leaching” mining techniques across multiple Malaysian states. This method extracts rare earth metals directly from clay soils without requiring high-impact open-pit mining or destroying natural forest vegetation.

The partners are designing proprietary closed-loop fluid systems to prevent groundwater contamination, making the project a critical rare earths milestone in environmental engineering. The technology transfer will help Malaysia exploit its massive, newly discovered clay deposits in Perak, Kedah, and Terengganu responsibly.

Moreover, the plant intends to extract actinium, an ultra-rare element utilized in targeted cancer therapy, which emits only minuscule levels of radiation. This unique medical-grade extraction capability positions the joint venture as a pioneer in advanced critical mineral refining.

3. Bypassing China’s Monopoly on Critical Minerals

For decades, China has controlled more than 90% of the global rare earth supply chain, leaving Western industries highly vulnerable to sudden export restrictions. This new ten-year partnership represents a major step in the West’s collective push to bypass Beijing’s geopolitical dominance.

The announcement comes alongside other major regional developments, including Australian miner Lynas partnering with South Korea’s JS Link to build a permanent magnet factory in Kuantan, underscoring that this rare earths milestone is part of a broader Western strategy. Together, these multi-million dollar investments are gradually shifting the global critical mineral balance of power toward allied nations.

French Ambassador to Malaysia Marc Abensour noted that the deal builds upon a memorandum of understanding signed during Prime Minister Anwar Ibrahim’s official visit to Paris. The strong diplomatic backing indicates that critical mineral security is now handled at the highest level of European foreign policy.

4. Malaysia’s Strategic Rise as a Downstream Powerhouse

With an estimated 274,144 metric tons of rare earth deposits, Malaysia is no longer willing to serve as a passive supplier of raw ore. The government’s strict export ban on raw rare earths, active from 2025 to 2027, is designed to force foreign companies to invest in local downstream facilities.

As global trade dynamics shift, this rare earths milestone will likely encourage other European firms to build clean manufacturing hubs in Southeast Asia. The influx of French expertise and high-end technology will help Malaysia capture maximum economic value from its natural resources.

For Malaysia, hosting this rare earths milestone aligns perfectly with its strict export ban, demonstrating that sustainable resource nationalism can successfully attract high-value foreign direct investment.

Critical Rare Earth Elements and High-Tech Applications

The table below highlights the specific elements to be processed at the Perak facility, showing their critical roles in the global transition to clean energy prior to this landmark rare earths milestone in Perak:

Rare Earth Element	Element Type	Primary High-Tech Application	Projected Role in Perak Plant
Neodymium (Nd)	Light REE	Electric vehicle (EV) motors, high-strength permanent magnets, smartphones.	Refined as a core oxide product to supply European and Asian magnet factories.
Dysprosium (Dy)	Heavy REE	Wind turbine generators, heat-resistant permanent magnets, defense guidance systems.	Separated via advanced extraction techniques; highly sought-after in heavy industry.
Terbium (Tb)	Heavy REE	Premium electronic displays, clean energy generators, marine sonar technology.	Refined to concentrated form; partial volume exported directly to Caremag in France.
Actinium (Ac)	Special Isotope	Targeted alpha therapy (TAT) for advanced cancer treatments.	Extracted under low-radiation protocols for specialized medical distribution.

By producing both light and heavy elements, the Carester-Malaco partnership addresses the full spectrum of Western strategic mineral vulnerabilities.