French rare earth specialist Carester confirmed on July 6, 2026 that it will build a separation plant in Malaysia's Perak state under a 10-year joint venture with Malaco Mining Group, targeting 13,000 metric tons of rare earth oxides per year including dysprosium and terbium. The deal includes technology transfer for clean in-situ leaching, actinium removal, and full rare earth separation, with some Malaysian concentrate feeding Carester's Caremag facility in southwest France. The project adds significant midstream ambition to a rapidly forming Southeast Asian supply cluster, but faces the same public resistance over radioactive byproduct handling that has shadowed earlier Malaysian rare earth ventures.
Introduction
On July 6, 2026, at a press conference held at the French Embassy in Kuala Lumpur, Carester CEO Frédéric Carencotte stood alongside French Ambassador Marc Abensour to announce what both sides described as a sovereignty partnership rather than a simple trade arrangement. The occasion was the formal confirmation of a 10-year joint venture between Carester, a French rare earth refining and process-engineering company, and Malaco Mining Group, a Malaysian miner, to build a rare earth separation plant in the state of Perak. The announcement formalized a relationship that had been building since an initial memorandum of understanding signed in July 2025, during Malaysian Prime Minister Anwar Ibrahim's visit to Paris.
The numbers attached to the project are significant. An initial pilot facility with capacity of up to 3,000 metric tons of rare earth oxides per year had been announced in January 2026. The July 6 announcement scales that ambition considerably: the full plant is now targeted at roughly 13,000 metric tons per year. The product slate covers both light and heavy rare earths, including neodymium, praseodymium, dysprosium, and terbium, the four elements that sit at the center of the global magnet supply crisis. French Minister for Foreign Trade Nicolas Forissier, speaking on July 9, put an even larger frame around the project, saying the combined output of the Perak plant and Carester's existing Caremag facility in southwest France could eventually meet 15 to 20 percent of global heavy rare earth demand.
The announcement lands at a moment when the structural shortage of separated dysprosium and terbium has moved from an industry concern to a geopolitical flashpoint. Building on my analysis of dysprosium and terbium price dynamics and the seven-month zero-export streak from China to Japan in July 2026, the Carester-Malaco venture represents one more node in the network of ex-China midstream capacity that Western governments and allied industry are scrambling to assemble. Whether this particular node can deliver, and on what timeline, is a more complicated question.
JV Structure, Technology Transfer, and the Link to Caremag in France
The joint venture is structured around three core technology transfers from Carester to Malaco. The first is clean in-situ leaching, a method of extracting rare earth elements by injecting chemical agents into soil to dissolve and pump out target minerals, without the need to mine hard rock. The second is a patented liquid-liquid extraction process for removing actinium, a radioactive element present in ionic clay deposits, at the earliest stage of processing so that radioactive waste is not generated downstream. The third is Carester's full rare earth separation technology, which the company says produces no wastewater and is capable of recycling carbon dioxide during production.
The feedstock model is hybrid. Malaco retains responsibility for securing mineral resources, with the JV currently seeking regulatory approval to conduct in-situ leaching on plantation lands across several Malaysian states. Carencotte was explicit that the material shipped to France would not be raw ore: it would be chemically refined concentrate that has already undergone initial processing in Malaysia. That concentrate will feed Carester's Caremag subsidiary, which is completing a rare earth recycling and refining facility in Lacq, in the Nouvelle-Aquitaine region of southwest France. Caremag is backed by 216 million euros, split between 110 million euros from Japanese investors via JOGMEC and Iwatani Corporation's joint vehicle, and 106 million euros from the French government. It is expected to begin operations by late 2026, with targeted output of 600 tonnes per year of dysprosium and terbium oxides and 800 tonnes per year of neodymium and praseodymium oxides.
The Malaysian and French facilities are therefore not parallel projects; they are designed as an integrated supply chain. Malaysia provides feedstock from ionic clay deposits; France provides final separation, recycling, and delivery to end customers including Japanese magnet makers under a long-term supply agreement. JOGMEC's involvement in Caremag already covers an expected 20 percent of Japan's future heavy rare earth needs, and Forissier signaled that Japanese participation in the Malaco JV itself is anticipated, potentially making this a three-way France-Malaysia-Japan corridor. Benjamin Gallezot, France's Inter-Ministerial Delegate for Strategic Minerals, was precise about the division of labor: feedstock access sits with Malaysian state and federal authorities, while environmental compliance is Carester's responsibility to guarantee.
Malaysia's Rare Earth Position and the Southeast Asian Midstream Cluster
Malaysia brings genuine mineral endowment to this partnership. The country holds an estimated 16.1 million metric tons of rare earth reserves covering all 17 rare earth elements, with deposits distributed across nine states, notably Perak, Kedah, and Terengganu. The Malaysian government values total REE deposits at roughly 810 billion ringgit. Critically, Malaysian deposits are predominantly ionic clay, the same deposit type that dominates Chinese light and heavy rare earth production in provinces like Jiangxi. Ionic clay does not require hard rock mining; the clay matrix holds rare earth ions that can be released by leaching with ammonium sulfate or alternative solutions, making in-situ leaching both technically feasible and, if done correctly, less environmentally disruptive than open-pit extraction.
Carencotte chose Malaysia deliberately for this reason. In his words, Malaysia has abundant ionic clay deposits containing both light and heavy rare earth elements, a combination that is relatively rare globally and which gives the country optionality across the full rare earth product slate. The Lowy Institute's analysis supports this framing: Malaysia currently accounts for 4 percent of global refined rare earth production, the largest share outside China, and remains the only country beyond China producing heavy rare earth products at commercial scale.
The Carester-Malaco announcement is arriving into a Southeast Asian midstream environment that is rapidly becoming crowded. Lynas Rare Earths, which operates the world's largest rare earth plant outside China at Kuantan in Pahang, announced in July 2026 a joint venture with South Korea's JS Link to build a neodymium-iron-boron sintered magnet factory adjacent to its existing processing facility. That plant would have a capacity of 3,000 tonnes of magnets per year, with construction starting in Q4 2026 and commissioning targeted for Q4 2027. Belgium's Solvay has been reported in active discussions about Malaysian processing partnerships. And the United States has reinforced interest in Malaysian supply, with Kuala Lumpur agreeing not to impose export quotas on critical minerals destined for American buyers as part of a broader bilateral arrangement. What is forming in Malaysia is not a single project story; it is a cluster of overlapping investments that collectively address the midstream processing bottleneck that remains the most consequential structural weakness in the Western rare earth supply chain.
The Radioactive Byproduct Problem: Historical Resistance and Carester's Answer
No account of Malaysian rare earth processing can responsibly omit the history of public resistance to it, because that history is directly shaping the political and regulatory conditions the Carester-Malaco venture will have to navigate. The precedents are not reassuring. In 1982, Asia Rare Earth Sdn Bhd opened a plant in Bukit Merah, Perak, the same state now targeted by the Carester-Malaco JV. By 1992, the plant was forced to close after environmental monitoring by Sahabat Alam Malaysia found radiation levels at a nearby open space and pool running 88 times higher than the upper limit permitted by the International Commission of Radiological Protection. The Bukit Merah episode became a defining trauma in Malaysian environmental history, and its legacy persists.
The Lynas Advanced Materials Plant near Kuantan, which began operations in 2012 at a cost of 800 million dollars, has faced sustained opposition across its entire operating life. By February 2023, the plant had produced over one million metric tons of radioactive waste, and the Malaysian government required Lynas to halt its cracking and leaching operations because they continued to generate radioactive residues. Organized civil society groups including Save Malaysia Stop Lynas, led by Bentong MP Wong Tack, have maintained pressure on both Lynas and the Malaysian government, with activists warning that the country risks becoming a pollution hub for rare earth processing.
Carencotte addressed these concerns directly and specifically. On the radioactivity question, he argued that uranium and thorium concentrations in ionic clay are significantly lower than in hard rock deposits, and that Carester's process removes radioactive elements at the earliest stage, avoiding the generation of radioactive waste further along the processing chain. On the actinium byproduct specifically, he made a commercially interesting claim: that actinium, which is used in the manufacture of radiopharmaceuticals and medical products, emits only minuscule radiation levels and can be sold to fertilizer companies rather than disposed of as waste. He also stated that the company's separation technology generates no wastewater and recycles carbon dioxide. These are credible technical claims given Carester's process engineering background and its 250-plus combined years of team experience, but they will require independent verification through Malaysia's environmental impact assessment process before any permits are granted.
Regulatory Hurdles, Geopolitical Stakes, and What the Timeline Actually Means
The regulatory picture is unresolved and, by Carencotte's own acknowledgment, the project is in early stages. No costs have been disclosed. No timeline has been provided. The JV is currently seeking approval from both national and state authorities to conduct in-situ leaching on plantation lands across multiple Malaysian states, and Carencotte declined to identify the specific locations. Malaysia operates a two-tier regulatory structure in which environmental and land-based governance sits primarily at the state level, adding complexity to any project that spans multiple jurisdictions. Carencotte said operations would depend on deposit locations identified by Malaco, and that projects could be distributed across different sites rather than consolidated in a single location.
The geopolitical motivation behind the venture is transparent and urgent. China controls approximately 85 to 90 percent of global rare earth separation and processing capacity. Its April 2025 export controls, tightened through 2025 and into 2026, have created the structural price premium and supply scarcity that has driven neodymium to 1,015,000 CNY per tonne (84 percent above year-ago levels) and produced seven consecutive months of zero dysprosium and terbium exports to Japan. Forissier's framing at the July 9 press conference was explicit: what France and Malaysia are building is a sovereignty partnership, not a trade partnership. The goal is to build, secure, and diversify supply chains. That language mirrors the U.S. approach described in earlier coverage of DOE's $275 million critical minerals program and the multiple domestic hydrometallurgical projects coming online across 2026.
The 15 to 20 percent global market share figure cited by Forissier for the combined Perak-Caremag system deserves scrutiny. Caremag's targeted output of 600 tonnes per year of dysprosium and terbium oxides would, at current production benchmarks, represent roughly 12 to 15 percent of non-Chinese heavy rare earth separation. The Malaysian plant at 13,000 tonnes per year of mixed rare earth oxides would add considerably to that volume, but only if feedstock access, permitting, and construction proceed on an accelerated schedule. The environmental impact assessments alone, given Malaysia's regulatory environment and the specific sensitivities around radioactive byproduct handling, could extend the timeline by several years. The ambition is credible; the execution risk is real and substantial.
Conclusion: A Strategic Architecture Still Under Construction
The Carester-Malaco announcement is best understood as the visible apex of a much larger diplomatic and industrial architecture that has been assembling quietly since mid-2025. The MOU signed during Anwar Ibrahim's Paris visit, the JOGMEC investment in Caremag, the France-Japan cooperation roadmap, and now the formal JV confirmation in Perak represent a coherent multi-year effort to route heavy rare earth supply chains through allied nations rather than through Chinese processing infrastructure. Malaysia sits at the center of that architecture because its ionic clay deposits are the right geology, its existing processing ecosystem (led by Lynas) provides a regulatory precedent, and its government has demonstrated willingness to engage Western partners on strategic mineral terms.
The technology Carester brings to the table is differentiated. Clean in-situ leaching for ionic clay, patented actinium removal without waste generation, and closed-loop separation without wastewater are not incremental improvements on conventional rare earth processing; they are designed specifically to address the environmental liability that has historically doomed Malaysian rare earth projects to public opposition. Whether Carester's process claims hold up under the scrutiny of independent environmental assessment and community engagement will be the project's most important near-term test.
The broader pattern visible from this announcement is consistent with the structural shift documented across the past several months of midstream capacity formation: Western governments and their industrial partners are no longer waiting for a single silver bullet. They are building overlapping, redundant, geographically distributed processing capabilities, connecting miners in Malaysia to refiners in France to end customers in Japan and South Korea. The Carester-Malaco JV is one node in that network, and if it delivers on its technical and environmental promises, 13,000 tonnes per year of separated rare earth oxides from Perak would represent one of the most consequential additions to ex-China midstream capacity in the current decade. The hard work of permitting, community engagement, and construction lies entirely ahead.