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What MCRE Means to Southern Alliance Mining Southern Alliance Mining (SAM) has been quietly undergoing a strategic shift, pivoting from its business of iron ore mining to become a vital supplier of strategic rare earth minerals. |
Where and What: A Unique Malaysian Asset
The MCRE facility is the country’s very first ionic clay rare earth mine.
Unlike primary ore mining—which demands disruptive open-pit excavation and deals with radioactive elements—ionic clay rare earths are naturally weathered into the soil in tropical climates, as SAM's CFO, Lim Wei Hung, said at an investor briefing.
This allows MCRE to utilize an environmentally friendly in-situ leaching method within a working rubber plantation.
Lim Wei Hung, CFO and Executive Director, Southern Alliance Mining, at the company's first results briefing in a long time. It features the first set of half-year results of SAM since it acquired a 40% stake in MCRE in Sept 2025.
Mr Lim was quick to dispel concerns about pollution, explaining that because the chemical injected is "basically fertilizer," the state corporation that owns the land realized their rubber yield has actually improved.
Why It Matters: Financial Rejuvenation and Geopolitics
For SAM, the MCRE mine is an exceptionally rich lode, outperforming competitors in critical heavy rare earths like Terbium and Dysprosium.
MCRE reported an impressive FY25 revenue of RM308 million and an EBITDA of RM140 million on a 100% basis.
| Following the completion of its 40% stake acquisition in MCRE in September 2025, SAM is uniquely positioned as the only Southeast Asian company offering investors direct exposure to a producing, profitable rare earths operation. The Gerik Mine employs an environmentally responsible in-situ leaching method, which avoids large-scale land clearing and minimises soil disturbance. |
To navigate China's heavy export restrictions on refining technology, SAM secured an agreement with the state-owned China Rare Earth Group for its specialized know-how in exchange for which the Chinese off-takes 100% of the product.
This prompted several pointed questions from the audience regarding SAM's leverage.
When one attendee asked if China dictating the terms meant SAM had no room to negotiate, Lim clarified that pricing is not arbitrarily set by China; it is transparently pegged to the Shanghai Metals Market using a mutually agreed-upon formula.
Mr Lim confidently described the relationship as symbiotic, noting it elevates to a "G-to-G kind of scenario" where Malaysia gains crucial knowledge to develop capabilities.
Asked how MCRE financed its operations, MrLim said before the acquisition by SAM was completed, multiple shareholders contributed the necessary capital totalling over RM100 million.
After operations commenced in September 2022, MCRE shareholders managed to recoup their entire RM100 million investment by 2025.
The table below shows the rising EBITDA of MCRE against a visual backdrop of a late stage for the extraction of rare earth carbonate in solid form from the precipitation of an aqueous liquid: 
(1) MCRE changed its financial year end to 31 July 2023, so FY23 comprised only 10 months from 1 Oct 2022 to 31 July 2023.
Below are SAM's 1HFY2026 (ended 31 January 2026) group results, reflecting a profitable REE business (gross profit of RM16.05 million and profit after tax of RM7.82 million) offset by losses in the legacy iron ore operations:
|
Metrics |
1HFY2026 (RM'000) |
1HFY2025 (RM'000) |
Y-o-Y Change |
|
Revenue |
137,301 |
70,278 |
95.4% |
|
Gross Profit/(Loss) |
5,442 |
(7,069) |
n.m. |
|
Loss before Tax |
(2,007) |
(11,464) |
(82.5)% |
|
Loss Attributable to Equity Holders |
(4,197) |
(10,282) |
(59.2)% |
|
Net Cash from/(used in) Operating Activities |
8,978 |
(5,604) |
n.m. |
An investor pointed out that iron ore has been a drag on earnings. SAM is actively advancing gold exploration initiatives along Malaysia's Eastern Gold Belt, focusing on defining potential zones for future heap leaching operations. |
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→ See SAM's Powerpoint deck here.
