A Blueprint for Regional Integration and REE Sovereignty
By Dr Mohd Safar Hasim
ASEAN holds the geological potential to become a rare-earth powerhouse. With an estimated 40–45 million tonnes of rare-earth element (REE) reserves, the bloc nearly rivals China’s 44 million tonnes.
Yet, this latent strength remains fragmented—scattered across national borders, state jurisdictions, and bilateral deals.
To transform this fragmented giant into a strategic force, ASEAN must forge a unified framework for REE governance, investment, and value-chain development.
This is not about challenging China’s dominance. It is about giving ASEAN a stronger, coordinated voice in shaping the future of green technology, supply chain resilience, and REE sovereignty — the ability to steward its own critical mineral destiny with transparency, civic trust, and strategic foresight.
Foreign Companies Operating in ASEAN’s REE Sector
ASEAN’s REE ecosystem is increasingly shaped by foreign partnerships. These companies bring capital, technology, and market access — but also expose the region’s fragmented regulatory landscape and uneven ESG enforcement.
Malaysia
* Lynas (Australia): Operates the world’s largest light REE separation plant outside China in Gebeng, Kuantan. Anchors Malaysia’s midstream ambitions.
* JS Link (South Korea): Partnered with Lynas to build a 3,000-tonne magnet manufacturing facility in Kuantan by 2025, signalling Malaysia’s move toward downstream integration.
* Shin-Etsu (Japan): Produces rare-earth magnets and voice coil motors in Shah Alam, serving global electronics and automotive markets.
* Bomatec (Switzerland): Manufactures plastic-bonded permanent magnets for industrial and automotive use.
* China Rare Earth Group (via MCRE Resources): Partnered with Perak for upstream mining and technology transfer, raising questions about strategic alignment and ESG oversight.
Vietnam
* Shin-Etsu and Showa Denko (Japan): Active in magnet sintering and midstream processing.
* South Korean firms: Involved in refining and export logistics.
* Chinese processors: Historically dominant in upstream mining and export channels.
Vietnam holds 22 million tonnes of REE reserves, making it ASEAN’s largest. Its policy clarity and industrial discipline position it as a linchpin in any regional REE corridor.
Indonesia
* Chinese and Korean ventures: Focused on integrating REE into nickel–EV battery supply chains, especially in Sulawesi and Kalimantan.
* REE is emerging as a complementary resource in Indonesia’s broader critical minerals strategy, though regulatory clarity remains a work in progress.
Thailand
* Japanese and Chinese pilot projects: Linked to electronics manufacturing and REE exploration.
* Thailand’s industrial base and logistics infrastructure make it a potential downstream hub despite modest reserves (~4,500 tonnes).
Myanmar
* Chinese firms: Dominate heavy REE mining, particularly dysprosium and terbium—critical for high-temperature magnets used in EVs and wind turbines.
* Operations face scrutiny due to environmental degradation and conflict-zone extraction.
Myanmar’s REE sector is a cautionary tale of unregulated boom-and-bust cycles.
Existing ASEAN Cooperation on REE
ASEAN’s formal cooperation on REE remains limited. However, some foundational efforts exist:
* ASEAN Minerals Cooperation Action Plan (AMCAP): Promotes sustainable mineral development and regional collaboration, but lacks enforcement teeth.
* ASEAN Centre for Energy (ACE): Proposes integrating REE into ASEAN’s clean energy transition, especially for wind and EV infrastructure.
* ERIA (Economic Research Institute for ASEAN and East Asia): Advocates for shared ESG standards and regional value chains.
* Bilateral MOUs: Dominate current cooperation—e.g., Malaysia–Korea (JS Link), Vietnam–Japan, Indonesia–China. These deals often bypass ASEAN-wide protocols, reinforcing fragmentation.
Despite these efforts, no dedicated ASEAN-wide REE council or regulatory framework exists. The absence of a unified voice limits ASEAN’s ability to negotiate with global partners or enforce environmental and social safeguards. Without a central mechanism, ASEAN risks becoming a passive supplier rather than a strategic architect.
What More Needs to Be Done
To build ASEAN into a true REE giant, the region must move from fragmented bilateralism to coordinated regionalism. A five-pillar framework is proposed:
1. ASEAN Rare Earth Council (AREC)
A central body to coordinate policy, ESG standards, investment protocols, and strategic planning. AREC would serve as a clearinghouse for data, licensing, and dispute resolution — ensuring that REE development aligns with regional goals and global expectations.
2. Shared Certification and Traceability System
To ensure transparency, prevent resource leakage, and support subsidy integrity. This system would align ASEAN with EU and U.S. import standards, enabling cross-border trust and ESG compliance. Blockchain-based traceability could be piloted in Malaysia and Vietnam.
3. REE Corridor Infrastructure Plan
Linking upstream mining (Myanmar, Malaysia) to midstream processing (Vietnam, Thailand) and downstream manufacturing (Indonesia, Malaysia). This corridor would attract foreign investment, reduce duplication, and create a seamless REE value chain. Strategic logistics hubs—such as Kuantan Port and Da Nang — could anchor the corridor.
4. Joint R&D and Workforce Development
ASEAN-wide training programs for geologists, engineers, and ESG auditors. Shared research hubs could accelerate innovation in in-situ leaching, recycling, and magnet sintering. Universities and technical institutes must be mobilized to build a future-ready REE workforce.
5. Strategic Dialogue with China, Japan, Korea, and the EU
ASEAN should position itself as a neutral, ESG-aligned supplier, offering reliability and transparency in a volatile global market. A multilateral REE forum could be convened annually, hosted by rotating ASEAN chairs, to align interests and preempt supply shocks.
Malaysia: A Microcosm of the Challenge
Malaysia’s internal fragmentation mirrors ASEAN’s broader dilemma. While the federal government envisions a full mine-to-magnet ecosystem by 2030, individual states are pursuing their own paths:
* Perak is working directly with China Rare Earth Group, bypassing SG4 coordination.
* Kelantan has signed a supply agreement with Lynas.
* Terengganu, Kedah, and Perlis are aligned under the SG4 Group, aiming for shared infrastructure and ESG protocols.
This decentralisation reflects Malaysia’s federal structure — but in the context of strategic minerals, it risks policy incoherence, investor confusion, and civic mistrust. A National REE Council could harmonise efforts, ensuring that state initiatives align with federal goals and international standards. Civic engagement and environmental safeguards must be embedded in every stage of the REE lifecycle.
What the Future Holds
If ASEAN acts now, it can become a global REE stabilizer—a neutral, diversified supplier in a world seeking alternatives to China’s dominance. The region’s reserves, industrial base, and geographic proximity to major markets (Japan, Korea, India, EU) give it a natural advantage.
But if ASEAN fails to integrate, it risks becoming a resource-rich but influence-poor region, exporting raw materials while others capture the value-added gains. The REE opportunity is not just economic — it is geopolitical, environmental, and generational.
Final Thought: From Fragmented to Formidable
ASEAN has the reserves. It has the industrial base. What it lacks is a shared voice. Building ASEAN into an REE giant is not just a matter of geology — it is a test of political will, civic foresight, and regional imagination.
The blueprint is clear. The time to build is now.
The views expressed here are entirely those of Dr Mohd Safar Hasim, a Council Member of the Malaysian Press Institute (MPI)
WE