Malaysia has the potential to become a stronger player in the global gold industry, but to achieve this, the country must establish a holistic and comprehensive National Gold Industry Management Framework. This call for action was made by Paya Besar Member of Parliament, Datuk Mohd Shahar Abdullah, who emphasised the need for better coordination and regulation in gold resource management.
Malaysia’s Gold Production: A Small Share in a Big Market
Based on data from the World Bureau of Metal Statistics – London Stock Exchange Group, Malaysia currently contributes just 0.06% of global gold production, with annual output ranging between 1.8 and 4.6 tonnes. Compared to the world’s 3,000 tonnes of total production, this is a modest figure, highlighting the untapped potential in Malaysia’s gold industry.
Fragmented Management Leading to Revenue Loss?
Despite the industry’s potential, Mohd Shahar, who also serves as the chairman of the Parliamentary Special Select Committee on Finance and Economy, pointed out that gold resource management is currently fragmented. Each state governs its own gold mining sector through their respective State Mineral Enactments, leading to inconsistencies in taxation and royalty collection.
“Does the existing coordination mechanism between the federal government, state governments, and concession companies ensure that royalties (which range between 5% to 10%) and tax revenues truly reflect the actual value of exported gold?” he questioned during the Dewan Rakyat session today.
His concerns are backed by the 2019 National Audit Report, which highlighted disparities in royalty rates across different states, potentially causing revenue leakage. This raises a crucial question: Should Malaysia implement a standardised mining contract at the national level?
Gold: A RM1.03 Trillion Resource Waiting to be Tapped
Malaysia’s metallic mineral resources, including gold, are estimated to be worth RM1.03 trillion, according to a 2021 study by the Department of Minerals and Geoscience Malaysia. The country’s rich gold deposits are concentrated in four main gold belts:
🔸 Central Belt (Pahang & Terengganu)
🔸 Eastern Belt (Kelantan)
🔸 Borneo Belt (Sabah & Sarawak)
🔸 Bentong-Raub Belt
To fully unlock this potential, modern mining technologies such as bio-leaching and satellite surveying should be explored to enhance gold extraction efficiency and minimise environmental impact.
A Global Approach: Learning from Argentina’s Gold Export Success
Mohd Shahar also suggested that Malaysia explore an International Gold Certification Partnership Programme to increase the value of its gold exports.
“In 2020, Argentina introduced its Gold Export Certification Programme in collaboration with the London Bullion Market Association (LBMA). Within just two years, the country saw a 40% increase in gold export value, as reported by the Central Bank of Argentina in 2022,” he said.
With the right policies, standardised regulations, and strategic international collaborations, Malaysia could significantly boost its gold industry while ensuring sustainable and responsible mining practices.
Conclusion: Time for a National Gold Strategy
With RM1.03 trillion worth of gold resources, Malaysia has a golden opportunity to elevate its mining industry to global standards. However, policy fragmentation, revenue leakages, and outdated mining practices could hinder this progress.
A National Gold Industry Management Framework could be the key to optimising production, increasing tax revenue, and ensuring sustainable mining practices—ultimately securing Malaysia’s place as a competitive player in the global gold market.
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