Deputy minister Syed Noh assures Clause 5.2.3 does not affect state revenues or control over mineral resources, aligning with constitutional provisions.
KUALA LUMPUR: A specific clause in the Malaysia-US trade agreement concerning critical minerals does not impact state revenues or their constitutional authority.
Natural Resources and Environmental Sustainability deputy minister Syed Ibrahim Syed Noh provided this clarification in the Dewan Negara.
He was responding to a question from Senator Pele Peter Tinggom regarding the implications of Clause 5.2.3.
The clause establishes a joint mechanism to assess foreign investments in rare earths and critical minerals.
Syed Noh emphasised that minerals fall under state jurisdiction as per the Federal Constitution’s Ninth Schedule, List II.
“Powers over land, mining leases, permits, and royalties remain with the states,” he said.
He stated the clause does not transfer these powers to the federal government or affect state rights over mineral resources.
The proposed mechanism aims to boost investor confidence in high-quality investments.
It also promotes domestic processing and downstream activities, according to the deputy minister.
He added that it reflects a commitment to investment security, aligning with international practices.
These include investment control frameworks in Australia and the European Union.
“The purpose is to assess foreign acquisitions or investments that could threaten national security, strategic supply chains, or sensitive technologies,” Syed Noh said.
He stressed it is not a tool to override state powers.
For coordination, foreign investments identified as a security risk will undergo an additional federal review.
However, the final authority to grant mining leases and permits remains exclusively with the states.
