Archive for June, 2011

Anti-Lynas groups criticise IAEA’s findings

Posted on June 30, 2011. Filed under: Pollution |

malaysiakini.com-

anti-Lynas groups are dissatisfied with the IAEA international panel’s review report on the Lynas Advanced Material Plant (Lamp), claiming that the scope of the suggestions is narrow as expected.

The chairman of Save Malaysia, one of the local anti-Lynas groups, Tan Bun Teet, said that he was not surprised by the outcome of the report.

“I would say the same thing if I were the government,” he told Malaysiakini when contacted.

However, he pointed out that the suggestions are not comprehensive enough is that they do not include how residents living nearby the plant will be affected once it starts operating.

NONE“The suggestions only talk about the radioactive safety measurements, but do not refer to the environmental hazard, and how it would destroy economic activities as well as the health of the people,” Tan (right) added.

He said that the group does not have confidence in authorities’ monitoring capabilities, adding that there had been so many weaknesses in previous construction projects.

“It needs one week to identify an egg (whether it’s fake or not). The parliament and court building are constantly facing leakage problems. Look at the collapse of the Terengganu Stadium’s roof.

“But those are small things, because they did not affect people’s life. If there are leakages at the plant, it (radioactive isotopes) will enter the food chain, it will become an endless tragedy,” he claimed.

Thus, Tan reiterated the stand of Save Malaysia, of not wanting the RM700 million rare earth plant to established at any corner of the country.

“Not only we are against it, many people will also oppose it,” he added.

‘Report backs our fears’

The IAEA international panel in its review report on Lamp, said that the team was not able to identify any non-compliance with international radiation safety standards.

However, the review team made an 11-point “necessary recommendations” to the Atomic Energy Licensing Board (AELB) for monitoring the plant before the start of operations, seven being technical recommendations.

NONEThe recommendations include the need for Lynas to submit its long-term plans for waste management to the AELB. Out of the 11 recommendations, five are to be carried out by the AELB.

The plant, which residents fear will produce highly toxic radioactive waste, is scheduled to begin its trial run in September.

Echoing Tan, the chairman of the Anti-Rare Earth Action Group (Badar) Andansura Rabu also said the report confirmed the protest movement’s fears raised so far.

“If we don’t protest, the plant will go along without the 11 conditions,” he said, adding that what has been mentioned on the report just merely paper work, which is different from reality.

He stressed that the group will continue protesting including taking legal action to stop the project.

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Lynas Project: IAEA mission makes 11 recommendations

Posted on June 30, 2011. Filed under: Pollution |

Malaysiakini.com

Summary of the findings and recommendations of International Review Mission on the Radiation Safety Aspects of a Proposed Rare Earths Processing Facility

Main findings

The review team provides the following independent expert opinion, recommendations and suggestions for good practice:

Compliance with international radiation standards

The review team was not able to identify any non-compliance with international radiation safety standards.

However, the review team identified 10 issues for which it considered that improvements were necessary before the next licensing phases of the Lynas project. Those recommendations are listed below and discussed in more detail in the report.

The review team also added an 11th recommendation dealing with the manner in which recommendations 1–10 should be acted upon.

Recommendations

Where the review team considered that improvements were necessary, it made recommendations. The report presents and discusses the situations and bases for each of those recommendations separately. The following 11 important recommendations are made:

Technical recommendations

1. The AELB should require Lynas to submit, before the start of operations, a plan setting out its intended approach to the long term waste management, in particular management of the water leach purification (WLP) solids after closure of the plant, together with a safety case in support of such a plan. The safety case should address issues such as:

(a) Future land use (determined in consultation with stakeholders);

(b) The dose criterion for protection of the public;
(c) The time frame for the assessment;
(d) Safety functions (e.g. containment, isolation, retardation);
(e) The methodology for identification and selection of scenarios – this must include the scenario in which the residue storage facility at the Lynas site becomes the disposal facility for the WLP solids;
(f) Any necessary measures for active and/or passive institutional control.
As the safety case is developed, the radiological impact assessment (RIA) for the facility as a whole should be updated accordingly.

2. The AELB should require Lynas to submit, before the start of operations, a plan for managing the waste from the decommissioning and dismantling of the plant at the end of its life. The RIA and decommissioning plan should be updated accordingly.

3. The AELB should require that the results of exposure monitoring and environmental monitoring once the plant is in operation be used to obtain more reliable assessments of doses to workers and members of the public, and the RIA updated accordingly. The AELB should also require that dose reduction measures be implemented where appropriate in accordance with the international principle of optimization of radiation protection.

4. The AELB should develop criteria that will allow the flue gas desulphurization (FGD) and neutralization underflow (NUF) residues to be declared non-radioactive for the purposes of regulation, so that they can be removed from the site and, if necessary in terms of environmental regulation, controlled as scheduled waste.

5. The AELB should implement a mechanism for establishing a fund for covering the cost of the long term management of waste including decommissioning and remediation. The AELB should require Lynas to make the necessary financial provision. The financial provision should be regularly monitored and managed in a transparent manner.

6. For regulating the Lynas project, the Malaysian Government should ensure that the AELB has sufficient human, financial and technical resources, competence and independence.

7. The AELB and the relevant Ministries should establish a programme for regularly and timely updating the Regulations in accordance with the most recent international standards. In particular, regulations pertinent to NORM activities relevant to the proposed rare earths processing facility should be considered to be updated.

Public communications recommendations

8. The AELB should enhance the understanding, transparency and visibility of its regulatory actions in the eyes of the public, particularly those actions related to inspection and enforcement of the proposed rare earths processing facility.

9. The AELB should intensify its activities regarding public information and public involvement. In particular, it should:

(a) Develop and make available easily understandable information on radiation safety and on the various steps in the licensing and decision making processes;

(b) Inform and involve interested and affected parties of the regulatory requirements for the proposed rare earths processing facility and the programme for review, inspection and enforcement;
(c) Make available, on a routine basis, all information related to the radiation safety of the proposed rare earths processing facility (except for security, safeguards and commercially sensitive information) and ensure that the public knows how to gain access to this information.

10. Lynas, as the party responsible for the safety of the proposed rare earths processing facility, should be urged to intensify its communication with interested and affected parties in order to demonstrate how it will ensure the radiological safety of the public and the environment.

Follow-up recommendation

11. Based on recommendations 1–10 above, the Government of Malaysia should prepare an action plan that:

(a) Indicates how the above-mentioned recommendations are to be addressed;

(b) Sets out the corresponding time schedule for the actions;
(c) Is geared to the possibility of an IAEA-organized follow-up mission, which will review the fulfilment of recommendations 1–10 above in, say, one to two years’ time, in line with other IAEA review missions.
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Putrajaya should probe not dismiss NYT’s Lynas report, says Fuziah

Posted on June 30, 2011. Filed under: Pollution |

-The Malaysianinsider-

KUALA LUMPUR, June 30 — Kuantan MP Fuziah Salleh flayed the Najib administration today for dismissing offhand a New York Times report claiming that Lynas Corp’s rare earth plant in Gebeng is being plagued by design problems and hazardous construction issues.

The PKR vice president said that it was unsurprising that the company made a swift denial of the NYT article after the government had appeared to ignore the claims in the article published today.

“MITI is responsible for bringing in the plant and it is the government’s duty to monitor and regulate it. How can they pass the buck straight to Lynas?” said Fuziah, who has been leading the charge against the controversial RM700 million plant that has raised fears of radiation pollution in and around her constituency.

Regulators Atomic Energy Licensing Board (AELB) had refused to comment on the report while International Trade and Industry Ministry (MITI) secretary general Datuk Rebecca Sta Maria had said in a press conference this morning that she had read the article and would leave it for Lynas to comment.

Lynas Corp boss Nicholas Curtis also rubbished the article in a press conference this afternoon stating that “there is no truth at all to the report. All engineers that are involved in this operation are now completely comfortable with the technical solutions.”

The NYT report coincided with the announcement by the federal government that a month-long review by a team of international experts had found that the refinery was safe according to international standards.

But the International Atomic Energy Agency-appointed (IAEA) panel recommended 11 improvements for Putrajaya to implement before awarding Lynas further licences, including the one the miner needs to start pre-operations.

The federal government has also pledged it will adopt all the suggestions while Lynas insists that it will still be able to begin operations by the end of the year.

Lynas has said that its plant — which will extract rare earth metals crucial for high-technology products such as smartphones, hybrid cars and wind turbines — will create a RM4 billion multiplier effect annually and will hire 350 skilled workers, 99 per cent of whom will be Malaysians.

Although reports say the plant may earn RM8 billion for Lynas, more than one per cent of the Malaysian GDP, critics have questioned the real economic benefit of the project, pointing to the 12-year tax break the Australian company will enjoy due to its pioneer status.

The federal government defended the Lynas project was a “strategic industry” for Malaysia in spite of the controversy it has attracted.

Sta Maria (picture, right) said the government expects Lynas to spend RM4 million a year, in addition to the RM700 million it has already poured into the rare earths plant.

It had previously estimated investment spinoffs of RM2.3 billion from the plant, including the RM300 million already poured into two factories in the Gebeng industrial zone that will produce hydrochloric and sulphuric acid needed to extract the rare earth metals

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Lynas plant safe by world standards, says review panel

Posted on June 30, 2011. Filed under: Pollution |

KUALA LUMPUR, June 30 — Australian rare earths miner Lynas Corp won today international approval for its RM700 million plant being built in Malaysia’s east coast after a UN review panel said it posed no radioactive risks to the thousands who live and work there.

But International Atomic Energy Agency-appointed (IAEA) panel recommended 11 improvements for Putrajaya to implement before awarding Lynas further licences, including the one the miner needs to start pre-operations.

The federal government has also pledged it will adopt all the suggestions.

The Sydney-based company had previously hoped to fire up its plant by September; it will be announcing its next step later today.

It had earlier requested a halt to trading on its shares.

The ministers’ statement was read by Sta Maria (centre). — Picture by Jack Ooi

Putrajaya, under pressure to show that the plant does not pose any radioactive risk, had called for experts from the IAEA to form an independent panel to review the health, environmental and safety aspects of Lynas’ rare earths plant in Pahang.

“The IAEA report concluded that it did not find any instance of ‘any non-compliance with international radiation safety standards’ in the Lynas project,” said Datuk Seri Mustapa Mohamed and Datuk Maximus Ongkili in a joint statement today.

 

Mustapa heads the International Trade and Industry Ministry (MITI) while Ongkili is the Minister for Science, Technology and Innovation (Mosti). Both were absent from today’s news conference but their prepared statement was read aloud by MITI secretary-general Datuk Dr Rebecca Sta Maria.

But the government and the Atomic Energy Licensing Board (AELB) declined to comment on a New York Times report today claiming Lynas’ Gebeng plant is being plagued by design problems and hazardous construction issues.

When asked, Sta Maria said she had read the article and would leave it for Lynas to comment.

The nine-man expert panel found Lynas to have complied with international health and safety standards, after a month-long review.

The full 55-page report deals with radiation protection, waste management, decommissioning an environmental can be read online at the IAEA website which is also linked to the Trade Ministry and Science and Technology Ministry websites.

Among the panel’s recommendations are for the federal government and its agency, AELB, to require Lynas, before the start of operations, to submit a plan detailing its waste management in the long run.

The review panel highlighted the need for the miner to address the management of the water leach purification (WLP) solids after it shutters the Gebeng plant, together with a safety case supporting its plan, which it listed as follows:

• Future land use (determined in consultation with stakeholders)

• The dose criterion for protection of the public

• The time frame for the assessment

• Safety functions (example containment, isolation, retardation)

• The methodology for identification and selection of scenarios, saying “this must include the scenario in which the residue storage facility at the Lynas site becomes the disposal facility for the WLP solids”

• Any necessary measures for active and/or passive institutional control.

It noted that as the safety case develops, there will be a need to update the plant’s overall radiological impact assessment (RIA).

The review also recommended Lynas ready a fund to cover the cost of the long-term waste management and decommissioning and remediation of the plant.

IAEA’s nuclear fuel cycle and waste technology chief Tero Varjoranta, who headed the review team, also urged the federal government to prepare a clear action plan and set a timeframe for the measures to be carried out within the next one to two years — in a short video clip timed to coincide with the public release of its report.

Lynas has said that its plant — which will extract rare earth metals crucial for high-technology products such as smartphones, hybrid cars and wind turbines — will create a RM4 billion multiplier effect annually and will hire 350 skilled workers, 99 per cent of whom will be Malaysians.

Although reports say the plant may earn RM8 billion for Lynas, more than one per cent of the Malaysian GDP, critics have questioned the real economic benefit of the project, pointing to the 12-year tax break the Australian company will enjoy due to its pioneer status.

The federal government defended the Lynas project was a “strategic industry” for Malaysia in spite of the controversy it has attracted .

Sta Maria said the government expects Lynas to spend RM4 million a year, in addition to the RM700 million it has already poured into the rare earths plant.

It had previously estimated investment spinoffs of RM2.3 billion from the plant, including the RM300 million already poured into two factories in the Gebeng industrial zone that will produce hydrochloric and sulphuric acid needed to extract the rare earth metals.

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Design problems, hazardous construction plague Lynas plant, reports NYT

Posted on June 30, 2011. Filed under: Pollution |

-The Malaysianinsider-

KUALA LUMPUR, June 30 — The controversial Lynas rare earths refinery in Kuantan is plagued by environmentally hazardous construction and design problems, the New York Times has reported, citing internal memos and current and former engineers on the project.

The report published today said the issues, including moisture in humid Malaysia, could potentially affect the RM700 million Lynas Corp plant being built to challenge China’s stranglehold in the key rare earths industry.

Malaysia is due to announce today the results of an independent international review of the plant that is scheduled to open this September. The listed Lynas Corp has asked for a halt in its share trading in Australia today pending the report.

Signboard showing the site of the Lynas plant under construction in Gebeng, Kuantan. — File pic

In a report headlined “The Fear of a Toxic Rerun” by Keith Bradsher, the New York Times reported that Lynas officials contend that the refinery being built here is safe and up to industry standards, and say that they are working with its contractors to resolve their concerns.

“All parties are in agreement that it is normal course of business in any construction project for technical construction queries to be raised and then resolved to relevant international standards during the course of project construction,” wrote Matthew James, an executive vice-president of Lynas, in an e-mail last night.

But the construction and design may have serious flaws, the engineers told New York Times, and provided proof through memos, e-mail messages and photos from Lynas and its contractors. The engineers said they felt a professional duty to voice their safety concerns, but insisted on anonymity to avoid the risk of becoming industry outcasts.

“The problems they detail include structural cracks, air pockets and leaks in many of the concrete shells for 70 containment tanks, some of which are larger than double-decker buses,” the paper said.

Lynas is mining rare earths ore deep in the Australian desert and shipping to Malaysia to be mixed with powerful acids to make a slightly radioactive slurry that would be pumped through the tanks, with operating temperatures of about 200 degrees Fahrenheit.

The engineers say that almost all of the steel piping ordered for the plant is made from standard steel, which they describe as not suited for the corrosive, abrasive slurry. Rare earths refineries in other countries make heavy use of costlier stainless steel or steel piping with ceramic or rubber liners, the paper said.

“The engineers also say that the concrete tanks were built using conventional concrete, not the much costlier polymer concrete mixed with plastic that is widely used in refineries in the West to reduce the chance of cracks.

“Documents show that Lynas and its construction management contractor, UGL Ltd of Australia, have argued with their contractors that the cracks and moisture in the concrete containment walls are not a critical problem,” according to the report.

Memos also show that Lynas and UGL have pressed a Malaysian contractor, Cradotex, to proceed with the installation of watertight fibreglass liners designed for the containment tanks without fixing the moisture problem and with limited fixes to the walls. But Cradotex has resisted, the paper reported.

“These issues have the potential to cause the plants critical failure in operation,” Peter Wan, the general manager of Cradotex, said in a June 20 memo obtained by New York Times.

“More critically the toxic, corrosive and radioactive nature of the materials being leached in these tanks, should they leak, will most definitely create a contamination issue.”

Wan said in a telephone interview with the New York Times on Tuesday that he believed Lynas and UGL would be able to fix the moisture problem but that he did not know what method the companies might choose to accomplish this.

A man walks past the under-construction Lynas Corp rare earth plant in Gebeng, Kuantan on June 29, 2011. — Reuters pic

The fibreglass liners are made by AkzoNobel of Amsterdam, one of the world’s largest chemical companies. AkzoNobel says it, too, worries about the rising moisture.

“We will not certify or even consider the use of our coatings if this problem can’t be fixed,” Tim van der Zanden, AkzoNobel’s top spokesman in Amsterdam, wrote on Monday night in an e-mail reply to questions.

Memos show that the refinery’s concrete foundations were built without a thin layer of plastic that might prevent the concrete pilings from drawing moisture from the reclaimed swampland underneath. The site is located just inland from a coastal mangrove forest, and several miles up a river that flows out to the sea past an impoverished fishing village.

An engineer involved in the project said that the blueprints called for the plastic waterproofing but that he was ordered to omit it, to save money. The plastic costs US$1.60 (RM4.80) a square foot, he said.

Lynas disputes that the design ever called for using the plastic.

Nicholas Curtis, the executive chairman of Lynas, said in a telephone interview from Sydney on Monday that the project here met local environmental standards and that he believed those were consistent with international standards.

“I have complete confidence in the Malaysian environmental standards and our ability to meet the requirements,” he told the New York Times.

Engineers at the project said that Lynas officials had whisked the international inspectors through the factory in a single morning, partly because of security concerns about protesters outside the refinery gates. The team had little chance to examine the refinery’s structure, the engineers said.

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Fuziah: IAEA report raises doubts over Lynas plant

Posted on June 30, 2011. Filed under: Pollution |

-The Malaysianinsider-

KUALA LUMPUR, June 30 — While Putrajaya and Lynas Corp say an international panel has found the Australian miner’s rare earth refinery safe,  Kuantan MP Fuziah Salleh is insisting that the report has raised several questions over the RM700 million plant in Gebeng.

The PKR vice president said the panel led by the International Atomic Energy Agency (IAEA) only stated it was “not able to identify any non-compliance” with international safety standards and also outlined “10 issues for which it considered that improvements were necessary.”

“All the data was submitted by Lynas so of course there is no non-compliance. If you read between the lines, the report contradicts itself, where it qualifies that there are many areas which are doubtful,” she told The Malaysian Insider today.

Fuziah (picture below), who has led the charge against the plant, said the report recommended that the Australian miner submit a plan for long term waste management before operations began, an issue that has been at the centre of protests by local residents and environmentalists.

She added that the report said that the government must ensure that local regulators Atomic Energy Licensing Board (AELB) “has sufficient human, financial and technical resources, competence and independence.”

The opposition lawmaker also pointed out that the report recommended that AELB develop criteria to declare gasses from the refining process as non-radioactive, indicating that there was still no indication if the gasses were radioactive or not.

Lynas said today that it expects the 11 recommendations set out in the report to be met by the end of the year, allowing it to begin selling the rare earth metals by the beginning of 2012.

The Australian miner has said that its plant — which will extract rare earth metals crucial for high-technology products such as smartphones, hybrid cars and wind turbines — will create a RM4 billion multiplier effect annually and will hire 350 skilled workers, 99 per cent of whom will be Malaysians.

Although reports say the plant may earn RM8 billion for Lynas, more than one per cent of the Malaysian GDP, critics have questioned the real economic benefit of the project, pointing to the 12-year tax break the Australian company will enjoy due to its pioneer status.

The federal government defended the Lynas project as a “strategic industry” for Malaysia in spite of the fears of radiation pollution that it has raised among local residents and environmentalists.

It had previously estimated investment spinoffs of RM2.3 billion from the plant, including the RM300 million already poured into two factories in the Gebeng industrial zone that will produce hydrochloric and sulphuric acid needed to extract the rare earth metals.

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No automatic licence for Lynas, says Putrajaya

Posted on June 30, 2011. Filed under: Pollution |

-The Malaysianinsider-

KUALA LUMPUR, June 30 — While Lynas Corp remains confident its RM700 million rare earths plant in Pahang will be able to fire up by year-end, Putrajaya reassured today a still jittery public the Australian supplier has not got the green light to operate.

Malaysia’s  trade minister Datuk Seri Mustapa Mohamed (picture) and his Cabinet colleague in charge of science and technology, Datuk Maximus Ongkili, said the federal government will ensure that Lynas fulfils the 11 conditions recommended by an expert review panel from the International Atomic Energy Agency (IAEA) in its report released today.

To move the project forward, Lynas will be required to provide a comprehensive long-term detailed plan for waste management, including at the decommissioning and remediation level, the federal government said.

“Until this is done, the status quo remains: there will be no importation of raw materials into the country, and no operational activities will be allowed on site,” the two ministers said in a joint statement.

Government radiation regulator, the Atomic Energy Licensing Board (AELB), said Lynas has only won approval for two licences out of five required to power up the rare earths refinery being built to challenge China’s global chokehold on the industry.

Rare earths metals are crucial for the manufacture of green consumer goods such as smartphones, energy-saving lighbulbs and cars.

AELB director-general Datuk Abdul Aziz Adnan told reporters today Lynas is licensed only to built its refinery at the present site in Gebeng but must submit more-detailed plans for managing its hazardous waste material both temporarily and permanently before AELB will consider giving it any further licences.

He added the agency will award them stage-by-stage.

To date, Lynas has cleared the site and construction stages; the other three phases it needs to clear are for the pre-operating, operating and decommissioning licences.

Aziz said Lynas has indicated to the agency its waste management plan, but added he could not disclose it at the moment due to a confidentiality clause.

The Sydney-based company is also required to deposit one per cent of sales from the Lynas Advanced Materials Plant (Lamp) with the federal government, Malaysia’s trade ministry secretary-general Datuk Rebecca Sta Maria disclosed in a news conference today.

Sta Maria said half the amount will go towards research and development and the other half is to go into a decommissioning fund for when the plant closes.

 

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Lynas to get Malaysian licence if recommendations met

Posted on June 30, 2011. Filed under: Pollution |

(Reuters) – Malaysia has ordered Australian miner Lynas to comply with an independent panel’s recommendations in order to receive a pre-operating licence for a rare earths facility.

For a related story:

The $230 million Malaysian plant is part of a plan by Lynas to process rare earths from its mine in Australia and bridge gaps in global supply after top producer China slashed its export quotas last year.

The proposed plan has hit a storm of protests on concerns that it could endanger the health of nearby residents.

Following are questions and answers on the proposed plant, and possible implications of any delay in its operation.

WHAT IS DRIVING THE PROTESTS?

Fear of a repeat of a controversial rare earths factory operated by Mitsubishi Chemical in the northern state of Perak, which was closed down in the 1990s after critics say it was linked to birth defects and at least eight leukaemia cases.

The protest against the Lynas plant is driven by local residents and green groups but is also increasingly being taken up by the country’s opposition, which is hoping to capitalise on the unhappiness to drum up anti-government sentiment.

HOW POLITICALLY SENSITIVE IS THE LYNAS PROJECT?

Increasingly, as it comes ahead of general elections which could happen as early as the end of2011. Prime Minister Najib Razak wants more foreign investment, but is wary of sparking voter anger after his ruling coalition suffered record losses in 2008 national polls.

Najib earlier this year scrapped a proposed coal-fired power plant by state power firm Tenaga in Malaysia’s Borneo state of Sabah after mounting protest over the project’s environmental effects.

Following the Lynas protest, the government also cancelled a memorandum of understanding with Hong Kong-listed CVM Minerals Ltd to conduct a feasibility study to explore and mine rare earth minerals in Perak.

WILL THE LYNAS PROJECT BE SHELVED?

Widespread anger by residents and green groups could put pressure on the Malaysian government to move cautiously on this project. Some analysts think the authorities could delay a decision until after the next general election.

Najib’s ruling coalition generally looks likely to retain power but a failure to reverse its 2008 polls losses would increase pressure on him to double efforts to shore up voter support, which could put the Lynas project in jeopardy.

WHAT WILL HAPPEN TO GLOBAL SUPPLY SCENARIO AND PRICES?

With the Malaysian government holding off approval for the processing plant, Lynas might have to stockpile the rare earths or look elsewhere to set up the facility. Either way, there will be a delay.

This could lift the supply deficit in the global market beyond a peak of 18,734 tonnes that Goldman Sachs has estimated for this year and delay a surplus scenario expected in 2013.

The concerns in Malaysia could further boost prices of rare earths that have risen due to top producer China cutting export quotas and strong demand for these commodities used in products ranging from cell phones to hybrid cars.

The price of cerium oxide — the most abundant rare earth that is used in batteries and petroleum additives — has more than doubled to $135 a kilo on May 9 from $52.62 in the last quarter of 2010, Lynas data show.

CAN CONSUMERS CAN RELY ON OTHER RARE EARTHS PRODUCERS?

Consumers may turn to U.S.-based Molycorp . The firm is modernising a rare earth mine and processing facilities at Mountain Pass in California, which was acquired in 2008 from Chevron Corporation .

Analysts say new mine production from Mountain Pass will start in 2012 although small-scale production from stockpiled rare earths has already resumed. Molycorp will produce 3,000 tonnes this year and that will quadruple next year.

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The Fear of a Toxic Rerun

Posted on June 29, 2011. Filed under: Pollution |

The New York Times-

KUANTAN, Malaysia — A $230 million refinery being built here in an effort to break China’s global chokehold on rare earth metals is plagued by environmentally hazardous construction and design problems, according to internal memos and current and former engineers on the project.

The plant, which would be the world’s biggest refinery for rare earths — metals crucial to the manufacture of a wide range of technologies including smartphones, smart bombs and hybrid cars — has also become the target of protesters who fear that the plant will leak radioactive and toxic materials into the water table.

Weekly demonstrations have drawn crowds since March, and someone recently threw gasoline fire bombs at the gated home of a senior project manager.

Some risks had been expected from the plant, which would refine rare earth ores into manufacturing-grade materials. Although rare earths are not radioactive, in nature they are usually found mixed with thorium — which is.

That is why the Lynas Corporation, an Australian company, promised three years ago to take special precautions when it secured the Malaysian government’s permission to build the sprawling complex here on 250 acres of reclaimed tropical swampland. It would be the first rare earth processing plant in nearly three decades to be finished outside China, where barely regulated factories have left vast toxic and radioactive waste sites.

Lynas has an incentive to finish the refinery quickly. Export restrictions by China in the last year have caused global shortages of rare earths and soaring prices. But other companies are scrambling to open new refineries in the United States, Mongolia, Vietnam and India by the end of 2013, which could cause rare earth prices to tumble.

Lynas officials contend that the refinery being built here is safe and up to industry standards, and say that they are working with its contractors to resolve their concerns.

“All parties are in agreement that it is normal course of business in any construction project for technical construction queries to be raised and then resolved to relevant international standards during the course of project construction,” wrote Matthew James, an executive vice president of Lynas, in an e-mail on Wednesday night.

The International Atomic Energy Agency issued a report Thursday that said the Lynas project’s overall design and planned operations procedures met international standards. The report did not examine construction details or engineering decisions involved in turning the design into a building; a program for the report’s authors showed that they were shown around the big site in an hour.

Nicholas Curtis, the executive chairman of Lynas, strongly denied at a press conference in Kuala Lumpur on Thursday that the refinery had any construction problems. He said that there were no more than routine discussions among engineers about technical questions.

But the construction and design may have serious flaws, according to the engineers, who also provided memos, e-mail messages and photos from Lynas and its contractors. The engineers said they felt a professional duty to voice their safety concerns, but insisted on anonymity to avoid the risk of becoming industry outcasts.

The problems they detail include structural cracks, air pockets and leaks in many of the concrete shells for 70 containment tanks, some of which are larger than double-decker buses. Ore mined deep in the Australian desert and shipped to Malaysia would be mixed with powerful acids to make a slightly radioactive slurry that would be pumped through the tanks, with operating temperatures of about 200 degrees Fahrenheit.

The engineers also say that almost all of the steel piping ordered for the plant is made from standard steel, which they describe as not suited for the corrosive, abrasive slurry. Rare earth refineries in other countries make heavy use of costlier stainless steel or steel piping with ceramic or rubber liners.

The engineers also say that the concrete tanks were built using conventional concrete, not the much costlier polymer concrete mixed with plastic that is widely used in refineries in the West to reduce the chance of cracks.

Documents show that Lynas and its construction management contractor, UGL Ltd. of Australia, have argued with their contractors that the cracks and moisture in the concrete containment walls are not a critical problem.

Memos also show that Lynas and UGL have pressed a Malaysian contractor, Cradotex, to proceed with the installation of watertight fiberglass liners designed for the containment tanks without fixing the moisture problem and with limited fixes to the walls. But Cradotex has resisted.

“These issues have the potential to cause the plants critical failure in operation,” Peter Wan, the general manager of Cradotex, said in a June 20 memo. “More critically the toxic, corrosive and radioactive nature of the materials being leached in these tanks, should they leak, will most definitely create a contamination issue.”

Mr. Wan said in a telephone interview Tuesday that he believed Lynas and UGL would be able to fix the moisture problem but that he did not know what method the companies might choose to accomplish this.

The fiberglass liners are made by AkzoNobel of Amsterdam, one of the world’s largest chemical companies. AkzoNobel says it, too, worries about the rising moisture.

“We will not certify or even consider the use of our coatings if this problem can’t be fixed,” Tim van der Zanden, AkzoNobel’s top spokesman in Amsterdam, wrote on Monday night in an e-mail reply to questions.

Memos show that the refinery’s concrete foundations were built without a thin layer of plastic that might prevent the concrete pilings from drawing moisture from the reclaimed swampland underneath. The site is located just inland from a coastal mangrove forest, and several miles up a river that flows out to the sea past an impoverished fishing village.

An engineer involved in the project said that the blueprints called for the plastic waterproofing but that he was ordered to omit it, to save money. The plastic costs $1.60 a square foot, he said.

Lynas disputes that the design ever called for using the plastic.

Nicholas Curtis, the executive chairman of Lynas, said in a telephone interview from Sydney on Monday that the project here met local environmental standards and that he believed those were consistent with international standards. “I have complete confidence in the Malaysian environmental standards and our ability to meet the requirements,” he said.

Mr. James, the Lynas executive vice president, said in a separate telephone interview from Sydney on Monday that the steel piping used in the plant was carefully engineered and would not pose problems. On the record, he declined to discuss issues with the concrete except to deny that rising moisture was a problem and to say that the tanks had been engineered to meet all safety standards.

In a second interview, on Tuesday, Mr. James said the company had not cut corners. “Lynas is well funded,” he said. “We would never compromise our standards for a cost savings.”

UGL declined to comment, citing a corporate policy of not discussing its customers’ construction projects.

Lynas started the project here three years ago, but had barely begun when it ran short of money during the global financial crisis. The company resumed the project last year after Chinese export restrictions on rare earths prompted banks and multinational users of the materials to offer generous financing.

Malaysia had reason to be cautious in allowing Lynas to build the plant. Its last rare earth refinery, operated by the Japanese company Mitsubishi Chemical, is now one of Asia’s largest radioactive waste cleanup sites. That plant, on the other side of the Malay peninsula, closed in 1992 after years of sometimes violent demonstrations by citizens.

Despite the potential hazards, the Malaysian government was eager for investment by Lynas, even offering a 12-year tax holiday. The project is Australia’s largest investment in Malaysia, intended to produce $1.7 billion a year in rare earths, or nearly 1 percent of Malaysia’s entire economic output. Lynas agreed to pay 0.05 percent of the plant’s revenue each year to the Malaysian Atomic Energy Licensing Board for radiation research.

Protests against the plant started in Malaysia after an article on Lynas’s project was published in The New York Times in early March.

Although Lynas has forecast repeatedly in recent months that it will start feeding ore into kilns by the end of September, engineers here said that it would take nine more months to install electrical wiring. They also said that pipe shipments were far behind schedule because of a six-month delay in ordering.

Mr. James insisted on Monday that the project remained on schedule, but he cautioned that Lynas was waiting to see whether the I.A.E.A. panel recommended any changes.

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Nuclear option still on the table, says Najib

Posted on June 29, 2011. Filed under: Energy |

-Free Malaysia Today-

The prime minister says Malaysia will not drop its plans to build a nuclear power plant.

KUALA LUMPUR: Japan’s Fukushima nuclear reactor disaster has not deterred the Malaysian government from continuing to pursue a nuclear energy plan.

Prime Minister Najib Tun Razak said that the government was in the midst of analysing Malaysia’s suitability for nuclear energy.

“We’re still studying nuclear energy as an option for the generation of electricity, while taking into consideration the instability of the Japanese nuclear reactor caused by a recent earthquake,” said Najib said in a written response in Parliament.

“The government is analysing short and long-term plans, taking into account all infrastructural aspects recommended by the IAEA (International Atomic Energy Agency).”

He was responding to a question posed by Hee Loy Sian (PKR-PJ Selatan) who asked if the government would abandon its plans to build a nuclear reactor in light of the Fukushima disaster.

In mid-March, the Fukushima Daiichi nuclear power plant was damaged when an earthquake and subsequent tsunami rocked eastern Japan.

Several nuclear reactors at the plant experienced a full meltdown, which led the Japanese government to initiate massive evacuation and cleanup efforts.

Nuclear plants by 2021

The cleanup efforts are still ongoing, with nuclear experts trying to contain the situation from deteriorating further.

Several developed countries, including Switzerland and Germany, have since announced plans to withdraw from using nuclear energy.

Malaysia, however, appears to have no such reservations. Najib said that many nuclear energy-using countries around the world were running stress tests on their reactors in light of Fukushima.

He said that Malaysia’s “relevant government agencies” would be studying the stress tests on these reactors, and using them as studies for considering nuclear energy in the country.

He added that other studies, including looking into suitable reactor sites, were being considered.

The government intends to build two 1,000-megawatt nuclear power plants by 2021, under its Economic Transformation Programme (ETP).

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