Daily Archives: 13/05/2011

(AlJazeeraA new rare earth refinery in Malaysia will generate billions of dollars, but could it cause an environmental disaster?

Rare earth minerals power many of today’s products, including smart phones, computers and defence weapons.

But the industry creates serious environmental waste.

China has 95 per cent of the market but aroused international alarm recently by drastically cutting rare earth exports and using it as a global trade weapon. Prices rose 300 per cent last year with top consumers scrambling to find new sources.

( Government, Lynas defend plant as review looms

Lynas, an Australian mining company is set to fill the gap, building the world’s largest rare earth refinery in Malaysia. But critics say it may cause an environmental disaster, similar to one from a defunct plant in the country 20 years earlier.

KUALA LUMPUR, May 13 — As public pressure threatens to scupper the RM700 million rare earth plant in Kuantan, both the government and Australian miner Lynas Corp defended the merits of the project on global television this morning.

In a 30-minute segment on Al Jazeera English’s 101 East this morning, Lynas, which hopes to begin operations in September, moved to allay fears of radiation pollution by insisting that Malaysia’s regulations were even stricter than in Australia.

A Barisan Nasional lawmaker also said that an independent review has only been ordered into the plant being constructed in the Gebeng industrial zone at this late juncture as Malaysia had to show it was investor-friendly.

Hulu Selangor MP P. Kamalanathan added that the controversial plant would create “hundreds and thousands” of jobs and bring billions into Gebeng, which is a major petrochemicals hub in the home state of Prime Minister Datuk Seri Najib Razak.

Kamalanathan appeared in a segment called “Toxic Profits” on the Doha-based channel where he spent 10 minutes debating with Kuantan MP and Fuziah Salleh.

PKR vice president Fuziah has been leading protests by her constituents against the plant.

Although the plant is a major project — if it goes ahead, will supply a third of the world’s rare earth needs and effectively break China’s monopoly on the market – the government has been mute on the issue until it put the refinery on ice when it ordered a month-long review on April 22.

It did not say when the review would begin and no further announcement on the matter has been made since then.

With Malaysia’s ability to attract foreign direct investment (FDI) appearing to be on the wane, the plant, which Lynas says will have a multiplier effect of RM4 billion per year, will be a major boost to the Najib administration.

Although Malaysia recorded FDI inflows of RM27 billion last year, this was after a dismal RM4.5 billion in 2009. A World Bank report also states that as compared to the period between 1990-2, the 2007-9 period saw FDI drop by 35.5 per cent.

The prime minister plans to double Malaysia’s per capita income by 2020 and says a six per cent economic growth must be maintained to achieve that goal.

“I think we’re looking at hundreds and thousands of employment opportunities and as far as investment is concerned, we are looking easily into RM2 billion,” said Kamalanathan, who holds no official post in the federal administration, during the show.

However, Fuziah, who first brought the issue up in Parliament soon after the project was announced in 2008, pointed out that Lynas itself has stated that it will only be hiring 350 workers.

Although she agreed that there will be a trickle-down effect, the government should weigh up the risks against the benefits as Lynas will enjoy a 12-year tax break.

Kamalanathan also defended the government’s decision despite the plant being scheduled to begin operations just four months from now.

He called the decision “fair” and “better late than never.”

“We give them initial approval but when there is public feedback, we tell them now, there is public concern, we will do this panel and it will determine where we go from here. I think that is fair,” the Putera MIC national coordinator added.

But Fuziah, who is PKR vice president, pointed out that in other developed countries such as the United States and “Australia where Lynas comes from,” it was standard practice to have public consultations before any approval was given.

“It is a bit late now that 70 per cent of the plant is already up,” she added.

She added that when Lynas first proposed the project that has since raised fears of radiation pollution, “only government departments and agencies were consulted.”

Lynas has faced opposition to its refinery from environmentalists and local residents who fear a repeat of the radiation pollution from a similar plant in Bukit Merah, Ipoh.

The Asian Rare Earth (ARE) plant in Perak has been linked to birth defects and at least eight cases of leukaemia in the past five years, seven of which were fatal.

Nearly 20 years after it was shuttered, the plant is still the subject of a massive RM300 million cleanup exercise.

Those opposed to the plant have repeatedly questioned whether the project was brought to Malaysia because Australia would not accept the radioactive waste from the process.

But Lynas said last week that it picked Malaysia over Australia as it has a more competitive environment for the chemicals industry.

It has also insisted that the waste product will be low in thorium, the radioactive element found in nearly all rare earth deposits.

The Australian company says the radioactive elements in its ore are “naturally occurring” and not at regarded as radioactive material by international standards.

On 101 East today, executive chairman Nicholas Curtis also said that Malaysia had stricter requirements than Australia.

“The standards here are as tight as anywhere else in the world and in some aspects even tighter. It is one of only two countries in the world which regulates naturally occurring radioactive material. Australia is not one of them,” he said.

Kamalanathan also pointed out that the government could not await approval from the various regulatory bodies — six, in the case of the Lynas plant — as it would delay projects.

“We have to show that we are investor friendly. We give an initial approval but if there are concerns, we will stop it,” the Putera MIC national coordinator said.

Lynas is anticipating a windfall of RM8 billion a year from 2013 onwards from the rare earth metals that are crucial to the manufacture of high-technology products such as smartphones, hybrid cars and bombs.