Malaysia Weighs Costs and Benefits of Rare Earth Metals Refinery

Posted on June 6, 2011. Filed under: Pollution |

 The Epoch Times

From far left, the vice chairman of “Save Malaysia, Stop Lynas” committee, Tan Bun Tee, moderator, Chow Z Nam, Jeffrey Phang, the chairman of Coalition of Good Governance, and Kuantan MP Fuziah Salleh. (The Epoch Times)

KUALA LUMPUR, Malaysia—A Malaysian politician has warned that the construction of the world’s largest rare earth metals refinery plant on the east coast of Malaysia poses health and environment risks to the area’s local inhabitants.

Speaking at a forum, Fuziah Salleh a member of parliament from Kuantan, warned her fellow Malaysians about the possible consequences of following in China’s footsteps in refining rare earth metals.

Rare earths, also known as strategic metals are key raw materials to production of high-tech products such as computer products, mobile phones, automotive, renewable energy equipment, and military weapons. It consists of a group of 17 metal elements at the bottom of the periodic table.

Exposure to such materials remains a hazard due to their carcinogenic nature. China is currently the only country that refines rare earth metals, giving it a monopoly in the industry.

Ms. Fuziah said China produces 30 percent of rare earths, but controls 95 percent of the global supply. The reason for this control she said was because no other country is willing to refine the ore. “Most countries shipped them to China for refining processes,” she said.

At the heart of the rare earth controversy in Malaysia is Lynas, an Australian mining giant. Lynas was awarded the license in 2008 to construct the RM700 million (US$232 million) rare earth metals refinery plant at the Gebeng Industrial Park, Pahang. It is the first rare earth ore processing plant to be built outside China in nearly three decades.

China’s existing standard of handling radioactive waste is different what is implemented in Australia under the 1992 Safe Code of Practice.

“Why are we so concerned about this?” asked Ms. Fuziah. “It is because there is not a single rare earth refinery outside of China. In the petrochemical industry, there are standards and guidelines established for their waste management,” she said.

“However, there is not one being established for rare earth metals. We know that there are many academic journals being published that describe how rare earth refinery plants in China had damaged the environment, how it had lead to cancer, and so on. We certainly do not want to use this as a benchmark,” said Ms. Fuziah.

“China is facing severe environmental damages. Even they are shutting down some of their refineries. So, why should Malaysia build one?” she continued.

The plant is located in the northeast and 25 km (15.5 miles) away from Kuantan, the capital of the Malaysian state of Pahang. It is currently 70 percent complete, and is scheduled to be operational by September. It is also expected to create 350 job opportunities.

When fully operated, this will be the world’s largest rare earth refinery plant with an estimated annual production of 22,000 tons of rare earth metals, valued at RM800 million (Malaysian riggit) ($265.3 million)—equivalent to 30 percent of the global market.

The Ministry of International Trade and Industry (MITI) announced that the independent international panel of experts responsible for reviewing the safety of the Lynas plant will organize public consultation sessions. A report would then be submitted to the government and public.

MITI emphasized that the panel is comprised of foreigners who are independent and professional members relevant to the industry. There are no Malaysians, Australians, or Chinese to avoid any possible conflicts of interest.

Malaysian Trade Minister Mustapa Mohamed says the refinery will not receive government approval to being operational until the panel completes its assessment. “We will never compromise the public interest in the handling of the Lynas issue, and the health and safety of our people and the environment will continue to receive the highest priority,” Mohamed told a press conference on April 26.

Speaking at the same forum, the vice chairman of the ‘Save Malaysia, Stop Lynas’ committee, Tan Bun Tee, said, “We realized that if constructed in Australia, a plant of such scale must be at least 30 km [18.6 miles] away from residential area. In other words, it needs a 30-km of buffer zone.”

“However, the Lynas plant in Gebeng Industrial Park is about 2 km [1.2 miles] away from a high-density household area. This means that we have about 700,000 people living within 30 km radius of this plant,” he said.

According to Mr. Tan, previous communications with government officials ended up in frustrations and without concrete answers. The committee’s foremost action is to submit a memorandum to the Australian High Commission and will continue to organize a series of activities until the end of June.

“We hope that people outside of Kuantan can help us. Our ultimate goal is to stop the operation of Lynas refinery plant.”

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