Malaysia approves Australian rare earths plant

Julia Zappei (AFP) Google News 1 Feb 12;

KUALA LUMPUR — Malaysia gave the green light Wednesday for a controversial rare earths plant being built by Australian miner Lynas despite fears its could produce harmful radioactive waste.

Malaysia's Atomic Energy Licensing Board said it granted a licence for the plant, which is near completion in the eastern state of Pahang, to begin operations for an initial two-year period under strict safety requirements.

"Based on the decision of the board, Lynas's application for a temporary operating licence is approved with several conditions," a board statement said.

It added the licence could be suspended or revoked if the company failed to meet conditions on handling potentially hazardous waste.

The facility is set to become one of the few sites outside China to process rare earths -- metals used in high-tech equipment ranging from missiles to mobile phones.

Lynas has insisted the plant, which will handle rare earths imported from Australia, will be safe. But critics say radioactive waste could leak out, threatening public health and the environment.

The atomic licensing board reviewed Lynas's application in a closed-door meeting on Monday. The plant had originally been slated to start operations in the third quarter of last year.

The board said Lynas must submit plans within 10 months on how it would safely dispose of plant waste, and return it to "the original source" if necessary.

It also said Lynas will pay $50 million to the Malaysian government as financial guarantee. If Lynas breaches the conditions and loses the license, it cannot apply for another, it said.

Fuziah Salleh, an opposition lawmaker in Pahang who has lead protests against the plant, said lawyers were expected to seek a court injunction to stop the plant from starting operations.

Fuziah, whose constituency is Kuantan, a coastal town near the plant site, said the company's waste management plan was "incomplete, full of holes and unacceptable".

"Of course I'm disappointed," she told AFP. "Basically the residents will become lab rats. We will become experiments."

Thousands of Malaysian opponents of the plant have held protests against the plant, mainly in Kuantan, over health and safety concerns.

The concerns led Malaysia to invite a panel of experts from the International Atomic Energy Agency to assess plans for the plant last year.

Malaysia ordered Lynas to comply with all safety recommendations made by the panel. Lynas has pledged to do so and says any waste will be handled according to strict standards.

Currently, China produces more than 95 percent of the world's rare earths -- 17 elements critical to manufacturing everything from iPods to low-emission cars.

But Beijing has angered its trade partners by restricting overseas shipments in a bid to burnish its green credentials and tighten its grip over the metals, leading other countries to explore alternate sources.

With Approval, Malaysia Refinery Expects to Open This Year
Keith Bradsher New York Times 1 Feb 12;

HONG KONG — Malaysian regulators granted an initial operating license late Wednesday for a giant rare earth metals refinery that has been at the center of a dispute over radioactive waste management.

The refinery is expected to open in this year’s second quarter. It is intended to offer an alternative for Western companies that now depend on Chinese producers.

China mines and processes more than 90 percent of the world’s rare earths, but has placed various restrictions on their export in recent years, causing price spikes and spot shortages. The metals are used in items as diverse as smartphones and smart bombs, in oil refining and in wind turbines.

The Malaysian Atomic Energy Licensing Board said in a statement late Wednesday that Lynas, the Australian company that is building the refinery, must specify within 10 months a location and submit detailed plans for a permanent disposal of the more than 1,000 tons a month of low-level radioactive waste that the refinery will produce. Although the issue is not expected to delay the plant’s opening, it will put pressure on the company to find a solution to the waste problem.

Lynas for several years has been studying what to do with the waste and still has an active research effort under way. But it has encountered growing hostility from people living near the refinery, which is on the outskirts of Kuantan in eastern peninsular Malaysia.

The licensing board said that the waste “is the responsibility of the company including, if necessary, to return the residue to the original source.” That would refer to Australia.

The refinery will process concentrated rare earth ore from a Lynas mine deep in the desert in western Australia, using heat and thousands of tons a year of powerful sulfuric acid to separate the valuable minerals from dirt and radioactive contaminants.

Lynas has questioned whether it could be required to ship waste back to Australia, a task that would be extremely difficult because of international and Australian regulations on movements of waste with even very low levels of radioactive contamination.

Nicholas Curtis, the executive chairman of Lynas, has said that the company chose Malaysia for the refinery for cost reasons: Malaysian engineers earn considerably less than Australian engineers, and Malaysia’s natural gas industry produces very large quantities of sulfur that will be turned into the necessary processing acid at a separate factory adjacent to the refinery.

The Malaysian board announced its decision during the middle of the night in Australia, and Lynas executives could not be reached for immediate comment. Mr. Curtis said in a conference call with investors and journalists on Tuesday that the first of two phases of the refinery project was more than 90 percent complete, and that 85 percent of the staff had already been hired.

Fuziah Salleh, an opposition member of Malaysian Parliament who represents downtown Kuantan but not the less affluent industrial area where the refinery is located, said that critics of the project had already retained lawyers to seek a judicial review of the initial license. The legal challenge will be based on whether Lynas should file a more detailed environmental impact assessment for the refinery, in response to stricter assessment requirements written into Malaysian law last summer.

The International Atomic Energy Agency had suggested last summer that a plan for permanent waste disposal be approved before the refinery starts operations.

The Malaysian decision comes two days after the World Trade Organization’s highest tribunal ordered China to dismantle its taxes and quotas on exports of bauxite, zinc and seven other industrial minerals.

That W.T.O. decision did not include rare earths. But China has used the same legal arguments to defend its export taxes and quotas for rare earths — arguments that the trade organization has now rejected. The United States and the European Union have been preparing to file a possible case with the World Trade Organization challenging China’s rare earth policies.

The Global Times, a newspaper directly controlled by the Chinese Communist Party, published a blistering editorial on Wednesday condemning the trade organization’s decision, saying it would wrongly force China to export a product that is environmentally dangerous to mine and process.

“Cheap exports of its resources such as rare earths will eventually undermine the domestic industry that relies on them,” the editorial said. “China has been alerted to the unsustainable practice, and export restrictions are inevitable.”

Rare earth plant given temporary licence
Safety requirements imposed but Kuantan residents vow to continue protest against facility
Lester Kong Straits Times 2 Feb 12;

KUALA LUMPUR: The Malaysian government has granted a controversial rare earth plant in Kuantan a temporary operating licence, despite strident protests by residents and green groups over fears of the radioactive waste it will produce.

After hearing recommendations from the Atomic Energy Licensing Board on Monday, the government said yesterday it will award the Australian company Lynas Corporation a temporary licence to start operations, but imposed five conditions related to safety, including several on waste disposal.

Among others, Lynas must detail its plans for a permanent disposal facility for waste residue.

'If the conditions are not complied with, the temporary licence may be suspended or revoked and the next licence application will not be considered,' said Mr Ghazali Ismail, a spokesman for the board.

The board added that the company also held full responsibility for the plant's by-products and residue, which, if necessary, should be returned to 'the original source', meaning Australia.

The board's director-general Raja Aziz Raja Adnan did not want to say how long the temporary licence would be for, saying only that it was given for a 'fixed duration'. But media reports indicated that the licence would last for two years.

Datuk Raja Aziz said more details will be released at a briefing tomorrow.

The awarding of the licence quickly drew outrage from residents, opposition parties and environmental groups, and came just after several green groups revealed plans for a series of rallies this month.

Built to process rare earths materials used in the production of many consumer electronics, the Lynas plant has drawn intense opposition from Kuantan residents and environmentalists ever since it was reported. Many fear the potential impact of its radioactive wastes, especially as wastes from Malaysia's last rare earths refinery in Perak were believed to have caused several cases of birth defects and leukaemia in the 1980s.

'Basically, Kuantan people will be lab rats,' charged Kuantan MP Fuziah Salleh, who is from the opposition Parti Keadilan Rakyat. She said the party will file a judicial review to overturn the decision. 'This is the reverse to the government's ideal of putting the people first.'

Mr Wong Tack, who leads a coalition of activists called the Green Assembly 2.0, said the approval will fuel anger towards the government.

'The people will not tolerate this and will fight it until it is closed,' he warned.

Observers also say that the plant could become an election issue in polls expected to be called in months.

One green group, Save Malaysia, is holding a rally in Kuantan on Saturday, to coincide with another march in Kuala Lumpur by other groups. Green Assembly 2.0 is also planning to hold a protest in Kuantan on Feb 26.

'We're telling them that people here do not wish for such an industry in their backyard,' said Mr Tan Bun Teet, chairman of Save Malaysia.

His organisation and the Stop Lynas Coalition also plan to go to court to try to shut down the plant.

Located in the coastal town of Gebeng in Kuantan, Lynas' RM2.5 billion (S$1.03 billion) plant is one of the few sites outside China to produce rare earths materials.

It was intended to break that country's hold on the global market, and is also seen as a key part of Malaysia's economic development, with promises to generate many jobs and economic spin-offs.

The Australian firm has repeatedly sought to alleviate public concerns about its waste management plans.

Last month, it held public displays showing proposals to dump radioactive waste on an uninhabited island off Pahang and for a permanent disposal facility to be built on under-utilised or undeveloped land, or disused mining land.

But the plans only raised more ire, which was further stoked by reports from the New York Times yesterday saying that a key contractor had withdrawn from the project citing safety issues.

According to engineering sources quoted by the NYT, AkzoNobel, a supplier of resins for fibreglass liners for the plant's concrete-walled tanks, had pulled out because the plant's specifications were changed.

Lynas chairman Nicholas Curtis, however, insisted that AkzoNobel's withdrawal was not due to safety reasons.

While engineers told NYT that Lynas was building steel-walled tanks, removing the need for the resins, Mr Curtis maintained that the plant's specifications met Malaysian and international safety standards.