Malaysia Bars Rare-Earth Imports, Starts Review of Lynas Plant

Posted on April 22, 2011. Filed under: Pollution |


Lynas Corp. will be barred from importing raw materials into Malaysia until the completion of a study prompted by health and safety concerns related to a processing plant the Australian developer of rare earths minerals is constructing.

The Sydney-based company won’t get a pre-operating license until the month-long independent review is complete, the Malaysian government said. The company can continue building its $220 million refinery in Pahang state while it awaits the outcome of the panel’s study, Rebecca Fatima Sta Maria, secretary-general of the Ministry of International Trade & Industry, told media in Kuala Lumpur today.

“We will never compromise the public interest in the handling of the Lynas issue,” International Trade & Industry Minister Mustapa Mohamed said. “The health and safety of our people and the environment will continue to receive the highest priority in our deliberations in this regard.”

Protests, including a march on Parliament, have escalated following leakages at nuclear power plants in Japan after last month’s earthquake and tsunami. While technologies used in rare- earth processing are different, local residents and non- governmental organizations are concerned over radiation risks and what will happen to the waste.

The company will issue a statement later, Liz Whiteway, a Lynas spokesperson, said when phoned in Kuala Lumpur today for comment.

Market Growth

Lynas’s shares have jumped 353 percent in the past year amid escalating global demand for its minerals used in iPod music players and crystal displays. The stock rose 2.1 percent to close at A$2.45 yesterday, ahead of today’s market holiday.

Should it get the all-clear, the refinery will process rare-earth mineral ores, including neodymium and yttrium, from Lynas’s Mt Weld mine which is under development in Western Australia.

The market for rare earth minerals may double to as much as $6 billion by the middle of the decade, according to a report by Ernst & Young LLP analyst Michel Nestour yesterday. The market is currently valued at $2 billion to $4 billion, he wrote. Prices for some rare earths jumped more than 1,000 percent last year, Molycorp Inc. (MCP), the U.S. owner of the largest rare-earth deposit outside China, said in December.

China, the biggest holder of rare earths, has clamped down on mining while cutting export quotas to conserve resources and protect the environment. The initiative has boosted prices and sparked concern among overseas users such as Japan about access to supplies. Rare earths, 17 chemically similar elements, are used in sonar systems, flat-screen televisions, hybrid cars and computers.

Processing Plant

Lynas’s Pahang plant was due to start operations in five months, the Malaysian Insider reported on April 20. While the project had been approved by government, this was subject to environmental impact assessment, Prime Minister Najib Razak said in an interview on March 29.

The review panel will be formed soon and will comprise as many as seven independent experts, Raja Abdul Aziz Raja Adnan, director-general of Malaysia’s Atomic Energy Licensing Board told reporters.

Rare earth metals are key to global efforts to switch to cleaner energy — from batteries in hybrid cars to magnets in wind turbines. Mining and processing the metals causes environmental damage that China, the biggest producer, is no longer willing to bear.

China’s rare earth industry each year produces more than five times the amount of waste gas, including deadly fluorine and sulfur dioxide, than the total flared annually by all miners and oil refiners in the U.S. Alongside that 13 billion cubic meters of gas is 25 million tons of wastewater laced with cancer-causing heavy metals such as cadmium, Xu Xu, chairman of the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, said at a Beijing conference on Dec. 28.


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