KL govt puts rare earth plant on hold

Posted on April 23, 2011. Filed under: Pollution |

-the Malaysian Insider- Panel formed to review planned Kuantan refinery following growing concern

KUALA LUMPUR – Malaysia’s government has bowed to public pressure over the controversial rare earth plant near Kuantan and announced yesterday that a panel of independent international experts will review the RM700 million (S$287 million) refinery that has raised fears about radiation pollution.

Minister of International Trade and Industry Mustapa Mohamed said the panel will be appointed “in a few days” to review the plant being constructed by Australian miner Lynas Corp in the Gebeng industrial zone. He stressed that, until both the federal and Pahang state governments decide on the panel’s findings, “no pre-operating licence will be issued to Lynas … (and there will be) no importation into Malaysia of raw materials from Australia”.

Environmentalists and Kuantan residents have raised questions over radioactive waste being produced and stored at the plant, fearing a repeat of the last rare earth factory in Bukit Merah, Perak, which has been linked to eight cases of leukaemia, seven resulting in death. After being closed due to protest over radiation pollution in 1992, the refinery is still undergoing a clean-up process that is costing over RM300 million.

Pressure from their constituents has also pushed Pahang MCA leaders to call for a review of the plant that was expected to begin operations in September.

Mr Mustapa insisted the government’s latest move will not chase investors away, despite the RM700-million-project being called into review at the eleventh hour.

“It will not affect investor confidence because they are just as mindful of the environment as we are. In fact, this move will boost confidence,” he told a press conference in Kuala Lumpur.

The ministry’s secretary-general, Ms Rebecca Fatima Sta Maria, said that this would not affect construction of the plant which is ongoing. She said: “But without any raw material, it means that nothing can happen.”

The regulatory Atomic Energy Licensing Board (AELB) said the panel would probably consist of between five and seven experts.

Lynas had expected to receive a preliminary operating licence from the AELB before September, which will be renewed as a full licence within three years should the plant comply with agreed standards. It 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.

According to a New York Times report last year, China currently produces over 97 per cent of the world’s rare earth supply, mostly in Inner Mongolia. The Malaysian Insider

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