KUALA LUMPUR — Penang has identified non-radioactive rare earth element (NR-REE) deposits valued at approximately US$21 billion (RM87 billion), a potential new economic driver for the state, Chief Minister Chow Kon Yeow announced today.
Speaking at the state legislative assembly, Chow revealed that preliminary studies by the Minerals and Geoscience Department had uncovered NR-REE resources in several hilly areas, including Teluk Bahang, Balik Pulau, Bukit Mertajam, and Bukit Panchor, Malay Mail Online reported.
“The estimated NR-REE resources in the state are around 1.7 million metric tonnes, with an estimated value of US$21 billion, subject to confirmation through detailed studies,” he said.
Chow emphasised the importance of a solid state mineral regulatory framework before any exploration or resource development can take place.
“The state government is open to proposals from any party, local or international, interested in exploring NR-REE potential in Penang,” he confirmed, adding that each proposal would be thoroughly evaluated.
The initiative to tap new revenue sources comes as the state seeks to rebuild its consolidated account balance, which currently stands at RM235.55 million. Chow explained that the state had to dip into its reserves between 2020 and 2024 to fund increased welfare spending during the Covid-19 pandemic.
He reiterated his commitment to rebuilding the state’s reserves to RM1 billion through improved revenue collection strategies, including a multi-year plan to more than double the annual quit rent collection to RM300-350 million.
In a related move, Penang has proposed the creation of a special national commission to review the revenue-sharing model between the federal and state governments. Chow described the proposal as an essential step for ensuring fiscal justice and long-term development sustainability.
“The establishment of a special commission is the best mechanism to transparently reassess the existing formula based on clear agreements, not just for Penang but for the equity of all states,” he said.
Chow’s comments came in response to a question from Goh Choon Aik (PH-Bukit Tambun) regarding Penang’s ongoing claim for 20 percent of its tax revenue.
Chow pointed to data from the Malaysian Investment Development Authority (MIDA), which showed that Penang’s manufacturing sector investments totalled RM17.3 billion in 2024, with RM12.5 billion already recorded as of June.
Responding to Goh’s concern about whether the claim would weaken the Federal government, Chow argued that their fiscal relationship should be seen as mutually reinforcing.
He stressed the need to balance the revenue generated by the state with local development needs.
Chow also lauded the more open approach of the current administration under Prime Minister Datuk Seri Anwar Ibrahim, which has led to the realisation of several matters under the Malaysia Agreement 1963 (MA63).
“In this spirit, if MA63 can be realised, I believe other issues, including revenue sharing, can be considered with a more open attitude,” he said. – November 20, 2025