I don't think it's Malaysia producing rare earth. Those fucking Australians are bastards. They are shipping their own rare earth to Malaysia for processing. They don't want to contaminate their own grounds because the waste produced (after the processing) is highly toxic.
A lot of countries are very selfish. Japan is another example. They are the largest user of disposable chop-sticks, but they rely on imports. They don't fell their trees in order to preserve their own forests.