KUALA LUMPUR, 27 October 2026 — Malaysia must move beyond the extraction of raw minerals and strengthen its capabilities in processing, advanced technology and downstream manufacturing to establish a more strategic position in the global critical minerals supply chain, said Kelantan Deputy Menteri Besar Mohamed Fadzli Hassan.

Speaking at the SG4 Business & Economic Forum 2026, where he delivered a keynote address titled “Critical Minerals: Positioning Malaysia in the Strategic Global Supply Chain”, Mohamed Fadzli highlighted the growing importance of rare earth elements (REE) and other critical minerals amid the global energy transition and rising demand from the electric vehicle and semiconductor industries.

He said these developments presented Malaysia with significant opportunities to attract quality investments, develop domestic industrial capabilities and capture greater economic value from its mineral resources.

“ The key question is not simply how much mineral wealth we possess, but how effectively we can develop the value chain and position Malaysia as a strategic player in the global critical minerals industry,” he said.

According to data from the Department of Mineral and Geoscience Malaysia, the estimated value of the country’s mineral resources stands at RM4.11 trillion, highlighting the sector’s potential to contribute to long-term economic growth.

Mohamed Fadzli said Malaysia needed a comprehensive approach covering exploration, processing, refining, downstream manufacturing, research and technological development to ensure that a greater share of the economic benefits remained within the country.

SG4 states hold significant REE potential

Within the SG4 cooperation framework, the estimated value of REE deposits in Terengganu, Kelantan and Kedah stands at RM382.25 billion, RM129.15 billion and RM56.70 billion respectively, bringing their combined estimated value to RM568.10 billion.

He said the figures underscored the potential for closer cooperation among the participating states in coordinating investments, developing infrastructure, sharing technical expertise and building an integrated critical minerals industry.

A coordinated approach could also help strengthen domestic processing capabilities, encourage downstream industrial development and improve Malaysia’s ability to participate in higher-value segments of the global supply chain.

Rather than focusing solely on mineral extraction, he said, the states should work towards developing a more comprehensive industrial ecosystem that supports technology transfer, local expertise and value-added production.

Minerals could support Kelantan’s economic ambitions

For Kelantan, critical minerals represent a potential avenue for diversifying the state’s economic structure and creating new sources of growth.

With the estimated value of its REE deposits at RM129.15 billion, Kelantan aims to increase its real gross domestic product (GDP) to between RM45 billion and RM50 billion by 2035.

The state also sees the potential to generate between 5,000 and 10,000 jobs across the related mineral ecosystem over the next decade.

Mohamed Fadzli stressed that these ambitions would depend on the ability to attract quality investments, develop downstream industries, strengthen local technical capabilities and ensure that economic benefits reached the wider community.

He added that the development of the mineral sector should be guided by comprehensive technical and commercial assessments, with due consideration given to environmental protection, water resources, agriculture and community well-being.

Five strategic priorities

To strengthen Malaysia’s position in the global critical minerals supply chain, Mohamed Fadzli outlined five key priorities.

These include improving geological mapping and mineral resource databases; establishing a coordinated critical minerals investment framework among SG4 states; expanding processing and downstream manufacturing; strengthening human capital, research, innovation and technology transfer; and ensuring transparent governance, regulatory compliance and environmental protection.

He said technological capabilities and skilled local talent would be essential to reducing reliance on external expertise and enabling Malaysia to capture more value from its mineral resources.

At the same time, responsible governance and environmental safeguards must remain integral to mineral development to ensure that industrial expansion does not compromise natural resources or the livelihoods of local communities.

Success measured by realised investments and local value creation

Mohamed Fadzli said the success of Malaysia’s critical minerals strategy should not be measured solely by the estimated value of deposits or the amount of investment announced.

Instead, the focus should be on realised investments, quality employment, technology transfer, local industrial development and the ability to retain greater economic value within the country.

He emphasised that Malaysia’s long-term objective should be to evolve from a resource-owning nation into a country with the capabilities to process critical minerals, develop advanced technologies and manufacture higher-value products for global markets.

“With strategic planning, close cooperation among states, quality investments and responsible governance, critical minerals can become a catalyst for stronger economic growth, better employment opportunities and more sustainable prosperity for the people,” he said.

He added that balancing economic development with environmental sustainability would be essential to ensuring that the country’s mineral wealth delivered lasting benefits for current and future generations.