US ties to Israel rattle rare earth deal in Malaysia

A $96 million rare earth deal between the US Department of Defense (DoD) and Australian mining firm Lynas is facing significant backlash in Malaysia due to US ties with Israel. The four-year agreement aims to secure a supply of 17 critical rare earth metals, essential for modern technology and weapons systems, independent of China. The deal relies on Lynas' main processing plant in Gebeng, Malaysia, the largest facility of its kind outside of China.

• Malaysian non-government groups and locals are urging their government to block the deal or guarantee that the rare earths will not be used in weapons, citing the US as a major arms supplier to Israel and concerns about Malaysia's potential implication in "violations of international law across multiple theaters."
• Experts like Thomas Kruemmer, director of Ginger International Trade and Investment, note that for Malaysians, "this isn't really a case about rare earths. It's a case about Palestine."
• The Pentagon's involvement suggests the materials are likely for defense applications, as "If the material weren't destined for defense, the Pentagon wouldn't have signed the contract."
• Malaysia's government, facing pressure from a conservative electorate and rising Islamist parties, has until the end of the month to state its official position on the deal, balancing economic interests with political and religious considerations.