A Malaysian parliamentary special select committee met on July 16, 2026, to examine Lynas Rare Earths Ltd’s role and supply agreements with the US defense industry, including a binding letter of intent to supply rare-earth oxides to the Pentagon over four years [1, 2, 3]. The committee’s review addressed concerns that the supply deal may affect Malaysia’s reputation as a firm supporter of Palestine, given the country's lack of diplomatic ties with Israel and the US military's support for Israel’s war in Gaza [1, 2, 3].
More than 20 Malaysian civil society groups, including Greenpeace Malaysia, submitted a memorandum opposing the Lynas Pentagon supply contract. They urged tighter oversight of Malaysia’s rare-earth supply chain to safeguard national interests [1, 2, 3]. Lynas, one of only two major rare-earth miners outside China, operates mines in Western Australia and Malaysia, and is planning a permanent magnet factory [1, 3].
On July 7, Lynas announced an investment of about US$35 million to build a permanent magnet facility near Kuantan in partnership with South Korea’s JS Link. The plant is expected to produce 3,000 tonnes of magnets annually [2].
The parliamentary committee recommended that the Malaysian government develop a clearer foreign investment policy to protect sovereignty and issue an official stance on the Lynas US defense supply agreement within two weeks from July 17, 2026 [1, 2, 3]. It also advised coordination among the ministries of Investment, Trade and Industry; Foreign Affairs; Natural Resources and Environmental Sustainability; and Science, Technology and Innovation to seek legal counsel from the Attorney-General's Chambers regarding Lynas’ agreements [2].
Wong Chen, chair of the parliamentary special select committee, said, "Putrajaya must provide clarity on its approach to reassure the public of its direction in addressing the issue" [2]. The committee’s final deadline for the government’s official response on Lynas’ Pentagon supply deal is August 1, 2026.
