HK company to mine rare earths in Perak

Posted on April 27, 2011. Filed under: Pollution |

-The Malaysian Insider-

UPDATED @ 06:35:24 PM 27-04-2011
By Debra Chong
April 27, 2011

A local subsidiary has applied for a licence to explore a 250-hectare area. — Greentechmedia.com pic

KUALA LUMPUR, April 27 – A Hong Kong company and the Perak government have agreed to explore and mine for rare earths in the state, even as controversy is raging over the Lynas refinery in Pahang.

In a filing to the Hong Kong Stock Exchange dated April 18, CVM Minerals Limited — linked to Ho Wah Genting Berhad — announced it had entered into a memorandum of understanding (MoU) with the Perak State Development Corporation (PSDC) to carry out the project in Bukit Merah, Ipoh.

The Hong Kong company, through its local subsidiary CVM Metal Recycle Sdn Bhd, has applied to the state’s land and mineral office for a licence to explore the area, covering 250 hectares, for rare earths.

Bukit Merah was also the site of Malaysia’s last rare earths plant 20 years ago, which is still undergoing a massive RM300 million clean-up.

Environmentalists have raised questions over radioactive waste being produced and stored at Lynas’s Gebeng plant, fearing a repeat of the Japanese-owned Mitsubishi Chemical’s Asian Rare Earth (ARE) plant, which has been linked to eight cases of leukaemia, seven resulting in death.

The Australian miner’s shares dropped eight per cent to AU$2.25, as of 3.49 pm in Sydney, on the first day of trading since the Malaysian government announced a review of its plant in Gebeng.

CVM’s shares traded at HK$0.33 on the HK stock exchange, as of 4pm today.

CVMSB, which is headquartered here, was set up in 2007 to mine for dolomite and manufacture magnesium ingots in Malaysia.

It has been operating in Perak since June 2009 and is also exploring mining iron ore, coal and manganese.

CVM’s chairman, Goh Sin Huat, was formerly Ho Wah Genting Berhad CEO.

Ho Wah Genting, which also holds a stake in CVM, has also been reported as saying it would venture into tin mining to widen its earnings base.

The company also said that the deal with Perak’s investment arm has yet to be sealed.

“As of the date of this announcement, no legally binding agreement has been entered into between the company and PKNP in relation to the formation of the joint venture,” CVM said in its filing.

PKNP is the Malay acronym for PSDC, which is Perak’s state investment arm. It was also announced that PKNP is interested in taking up 135.3 million of CVM’s shares, which is about 4.73 per cent of the company’s total shares issued.

CVM also said that it would be the major shareholder of the rare earths project in Perak, if the two parties do finally agree to ink the deal.

The company noted that Bukit Merah is under the Northern Corridor Economic region (NCER) to develop human capital, agriculture, manufacturing, tourism and infrastructure.

“In the early nineties, two rare earth processing plants had operated at Bukit Merah to produce mixed rare earth products.

“The board of directors is of the view that due to the steady increase in demand for rare earth, the low export quota set by the government of the People’s Republic of China and the tremendous increase in prices of the minerals, there is good potential to venture into the rare earth mining industry in the Perak state,” CVM added.

Bukit Merah is part of the area known as Belanja, which covers about 11,137 hectares in the Batu Gajah district and has a multiracial population totalling 26,211 people.

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One Response to “HK company to mine rare earths in Perak”

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Competitive Legal Analysis
“Strategic Interest for Malaysia to compete with China in Rare Earth Competition”
Jeong Chun phuoc, 27th April 2011

Introduction
China is the world’s leader in the rare earth business. When the US and EU threaten China with human rights sanctions and political theatrics, China decided to restrict export of rare earth to the US and EU,etc.

Economic Reality
The economic reliance on China has indeed reached critical Level 7 if the International Nuclear Event Scale is to be used under this context. However, the act of domestic extraction of rare earth in the US and EU are not worth doing so from a cost-benefit analysis point of view.

Double Standard In Environmental Compliance
Why extract rare earth in our back yard when it is much much cheaper to import it directly from the dusty backyard of China.

Domestic Versus International Environmental Compliance
The exorbitant costs in rare earth extraction is mainly attributed to the rigorous environmental compliance under current EU and US radiation and environmental impact assessment and compliance regulations. China could afford to perform rare earth extraction for ages simply because both the US and EU could not impose their own high standards of radiation and environmental impact assessment and compliance regulations upon China.

Malaysia’s strategic interest
Malaysia present engagement in the rare earth business is a good move to wean itself -and as a favour to the US and EU- from over-dependence on China. This is just another example of political brinkmanship.

Recommendation I
The primary question is not so much on This is the crucial question that Malaysia must tackled is whether she can adopt China environmental compliance standard or the EU/US environmental impact and compliance protocols.

Executive Conclusion
Japan, South Korea and other nuclear powered nations departure from total reliance on oil as a result of the Arab and Israel wars and constant conflicts are clear indications of a strategic trend to move away eventually from the Arab oil equation. OPEC itself can offer no guarantee. Hence the adoption of nuclear power policies in Japan, South Korea while Scandinavian countries spearheaded the Renewable Energy (RE) directives.

…………………………..
Jeong Chun Phuoc
Expert Consultant and a pioneer advocate in Competitive Legal Intelligence(CLI)
and a Reader in Competitive Syariah Intelligence(CSI)
He can be reached at Jeongphu@yahoo.com

**The above professional analysis is the writer’s personal view and in no way represent the view/position of the research institutes/thinktanks/organisations to which he is currently attached to.


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