Malaysia seeks to suspend bauxite mining after environmental scare - cabinet source

Reuters 2 Jan 16;

Malaysia is pushing to suspend bauxite mining due to concerns about its impact on the environment, a cabinet source said on Saturday, threatening to interrupt supply of the aluminum-making ingredient to China.

The largely unregulated industry has grown rapidly in the last two years to meet Chinese demand. Bauxite mining was blamed for turning the waters red on a stretch of coastline and surrounding rivers in eastern peninsula Malaysia after two days of heavy rain earlier this week.

The cabinet wants to temporarily halt bauxite mining until regulations, licensing and environmental protection can be put in place, the source told Reuters on Saturday.

"The idea is to suspend it for a time until all this is sorted out, but ultimately the prerogative for licensing lies with the state," the source told Reuters on condition of anonymity as he was not authorized to speak to media.

Prime Minister Najib Razak has asked the resource minister to resolve the issues with the government of Malaysia's third-largest state and key bauxite producer Pahang, the source said.

Waters and seas near Pahang's state capital Kuantan ran red earlier this week as downpours brought an increase in run-off from the ochre-red earth at the mines and the stockpiles, stoking environmental concerns.

The state official in charge of the environment Mohd Soffi Abd Razak, however, said the pollution was caused by illegal mine operators and not by mines run by companies approved by the state government, according to local media reports.

"We believe the illegal miners are causing the waters to be murky," local daily Malay Mail quoted the official as saying.

Bauxite mines have sprung up in Malaysia since late 2014, notably in Kuantan, which faces the South China Sea.

The mines have been shipping increasing amounts of the raw material to China, filling in a gap after Indonesia banned bauxite exports in early 2014, forcing the world's top aluminum producer, China, to seek supplies elsewhere.

In the first 11 months of 2015, Malaysia exported more than 20 million tonnes of bauxite to China, up nearly 700 percent on the previous year. In 2013, it shipped just 162,000 tonnes.

But the frantic pace of mining in Kuantan has brought in its wake a growing clamor of voices complaining of contamination of water sources and the destruction of the environment.

Natural Resources and Environment Minister Wan Junaidi Tuanku Jaafar had previously said that Malaysia has come up with a raft of new regulations and guidelines for the industry, but needs the consent of the state government to impose them.

The minister could not be immediately reached for a comment by Reuters on Saturday.

(Reporting by Joseph Sipalan; Editing by Simon Webb and Himani Sarkar)