Malaysia probes Lynas US rare-earths deal amid transparency concerns

A Malaysian parliamentary select committee will hear a July 16 challenge to a $96 million rare-earths deal between Lynas Rare Earths and the U.S. Department of Defense, and lawmakers will examine whether the four-year agreement breaches local policy. The hearing puts a commercial contract, a national security supply chain and a fierce domestic political dispute into the same room.

The deal has become a flashpoint because it sits at the center of a strategic minerals chain that feeds defense hardware, electric vehicles, wind turbines and other advanced manufacturing. Reporting around the March 2026 agreement described a floor price of US$110 per kilogram for neodymium-praseodymium oxide, a key input for permanent magnets. For Malaysia, the issue is not only economic. Rights groups and activists have demanded more transparency over how the material will be used and where it ends up, with some linking the supply to weapons connected to the Gaza war.

Lynas’ Malaysian operations make that scrutiny even sharper. The company says its Kuantan facility in Gebeng, Pahang, has operated since 2012 and sits on a 100-hectare site in the Gebeng Industrial Estate near Kuantan. Lynas describes it as the world’s largest single rare-earths processing plant outside China, a claim that underlines why Malaysia has become an important processing hub in efforts to diversify supply away from Chinese control.

The political sensitivity is compounded by Lynas’ waste record. Malaysia renewed the company’s operating licence for 10 years in March 2026, but required it to stop producing radioactive waste by 2031. Government statements said Lynas had produced about 1.08 million metric tons of radioactive waste since 2012, a figure that has kept the plant at the center of environmental and public-health concerns for years.

That history has driven the latest backlash. In April 2026, 57 organisations signed an open letter opposing the company’s U.S. defense-linked agreement. Greenpeace Malaysia and Save Malaysia Stop Lynas also held a joint press conference in November 2025 warning about Lynas and the broader rare-earth industry in Malaysia. Now, as the parliamentary committee prepares to ask whether the deal crosses any local policy lines, the fight over Lynas has widened from waste management into a larger argument over sovereignty, environmental risk and who gets to control the strategic minerals powering both industry and defense.