Malaysia dismisses appeal against Lynas rare earths plant

Posted on June 15, 2012. Filed under: Pollution |

Reuters
Friday, Jun 15, 2012

KUALA LUMPUR – The Malaysian government dismissed on Friday a citizens’ appeal against a controversial rare earths processing plant owned by Australia’s Lynas Corp, removing a major obstacle to production.

But the science ministry, which was considering the appeal, added new two conditions Lynas must fulfill before a suspension of its temporary operating licence will be lifted.

The 2.5 billion ringgit (S$1 billion) plant in Gebeng, near the east coast city of Kuantan, has been plagued by delays since construction started two years ago.

Its operation is seen as a crucial step towards easing China’s grip on the global supply of rare earths, and for Lynas to profit from the high prices of the materials which go into making smart bombs, smart phones, and much in between.

Malaysia’s licensing body, the Atomic Energy Licensing Board, gave the plant a two-year temporary operating licence on Jan. 30, but that was suspended after local residents challenged the approval, citing safety and environmental concerns. They argued that the plant could contaminate its surroundings with radioactive waste.

Malaysia’s Minister for Science Technology and Innovation, Maximus Ongkili, said in a letter to the citizens’ lawyers he had to consider whether their arguments were supported by the scientific evidence.

He did not uphold the appeal, but instead imposed further conditions on Lynas. Under the new condition, the firm must submit plans to immobilise radioactive elements in the waste it will produce, and to submit plans for an emergency response on dust control.

“We expected this result, we’ll ask for a judicial review,” said Tan Bun Teet, who leads a group resisting the Lynas plant.

The ministry’s decision removes the biggest of two hurdles remaining before the Lynas plant can start production. A parliamentary select committee looking into the plant’s safety is expected to release its report next week.

The Lynas plant, the biggest in the world outside China, has been standing ready to fire up since early May. Demand is so strong that there are buyers for all the rare earths it can process in its first ten years of operation.

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