KUALA LUMPUR – Malaysian lawmakers have called on Putrajaya to declare its stance on concerns over the country’s rare earth operations being linked to the United States defence industry’s supply chain.

This came after Australian miner Lynas, which operates a rare earth processing plant in Pahang, signed a binding letter of intent with the Pentagon in March for a proposed four-year supply deal worth US$96 million (S$124 million).

Under the proposed agreement, the Pentagon will purchase light and heavy rare earth oxide products from Lynas to support US national security and supply-chain resilience. Such materials are essential for modern manufacturing and used in military systems.

The issue has thrust Malaysia into the geopolitical spotlight, with its lawmakers questioning whether rare earths processed in the country could become part of the US military supply chain, potentially complicating Putrajaya’s carefully balanced foreign policy and longstanding support for the Palestinian cause.

On July 17, a Malaysian parliamentary committee pressed the government to publicly clarify its position by the end of July.

The committee, which held a hearing on the matter on July 16, also recommended that Putrajaya develop a clearer foreign investment policy for strategic minerals to safeguard Malaysia’s interests, sovereignty and international reputation.

“The meeting was held to examine and assess the impact of the supply agreement, which is seen as potentially damaging Malaysia’s reputation as a staunch supporter of Palestine, founded on the principles of humanity and universal justice,” said the Select Committee on International Relations and International Trade.

Subang Member of Parliament Wong Chen, who chairs the select committee, declined to comment when contacted by The Straits Times. Lynas di...