Lynas protesters on the move
Opposition coalition condemns license for plant, vows to fight
Malaysia’s Atomic Energy Licensing Board approval Wednesday of a
temporary operating license for a contentious rare earths processing
plant in the eastern coastal state of Pahang seems certain to present
the opposition coalition with an emotive environmental issue that they
will use to their best advantage.
The Australian-owned Lynas Malaysia Sdn Bhd has been negotiating for
months with the national government over the project, which has been
largely ready for operation since late 2011. The government, gun-shy
over a previous rare earths plant in the state of Perak which turned
into an environmental disaster in the 1980s, has been reluctant to grant
permission to open the plant.
The issue is sensitive enough that the government had expected to
withhold permission to open the plant until after projected snap
elections set for late 2011 or the first quarter of 2012. However, the
United Malays National Organization-led coalition government appears
likely to put the elections off for considerably longer. Hence they
have allowed the granting of the temporary license.
“The opposition is incensed by this,” a government source warned in an
interview. “You can expect increased anti-Lynas activity. It is not
going to go away.”
Fauziah Salleh, a Kuantan member of parliament for the opposition Parti
Keadilan Rakyat charged in a prepared statement that the refinery would
make “lab rats” of Kuantan residents. Another opposition figure
charged that Lynas would make Pahang a “public toilet.”
To show how the opposition has quickly marshaled its forces in reaction
to the licensing, a group called “Save Malaysia, Stop Lynas” is expected
to march Saturday in Kuala Lumpur in defiance of the country’s laws
against public demonstrations without a permit “as we believe Lynas is
not just a Pahang issue, it's a Malaysian issue.” That ties in with the
opposition’s continuing opposition to the government’s revision of
public assembly rules, called “the Peaceful Assembly Bill 2011,” which
was passed over opposition objections in November because it bans street
demonstrations and requires assemblies, meetings and processions to be
held only on designated compounds.
A Lynas spokesman in Sydney, Australia, declined to comment to Asia
Sentinel on the political aspects of the situation. “It is a Malaysia
domestic political issue,” he said. “The government has awarded a
license, there are terms and conditions that we have met. I would have
thought once something has been granted it can only be taken away for
valid legal reasons.”
However, he said the plant is ready to begin operations sometime in the
June quarter of 2012. He insisted that the plant is safe, and that its
operations are far advanced from the Bukit Merah plant operated by
Mitsubishi Chemical in the mid-1980s. Mitsubishi so far has spent US$99
million to clean up the site. Eight workers at the plant died of
leukemia, which was tied to the plant’s operation.
The granting of the temporary license, however, is regarded as unlikely
to be reversed unless the political temperature rises a lot higher. The
Lynas spokesman said that the permit that allows the company to operate
the plant is subject to close government monitoring and gives the
government the right to close the facility if it finds it doesn’t meet
strict operating standards. Lynas has agreed to put up a US$50 million
deposit with the Malaysian government that it would forfeit if the plant
doesn’t meet standards. It must also within the next 10 months specify a
location for permanent disposal of about 1,000 metric tons per month of
low-level radioactive waste.
The Lynas spokesman also disputed a report that AkzoNobel, a Dutch
chemicals producer, had pulled out of a contract to supply resins used
to glue together fiberglass liners for concrete-walled tanks to hold the
radioactive waste.
The story that AkzoNobel had pulled out because it couldn’t guarantee
the safety of the product has energized opposition to the plant.
However, the Lynas spokesman said the report wasn’t true, that AkzoNobel
was one of several bidders and had not been selected by Lynas to supply
the materials.
The plant is crucial to plans on the part of Prime Minister Najib Tun
Razak to attract foreign direct investment under his two-year-old
1Malaysia Plan. FDI in 2010 amounted to US$9.7 billion, less than half
the US$20 billion attracted by Myanmar despite its status then as a
pariah state subject to US and European Union sanctions. Total FDI
inflows for the first three quarters of 2011 reached US8.72 billion,
meaning that when 2011 totals are in, FDI should surpass the 2010
figure.
However, authorities say FDI could dip again in 2012 as the Eurozone
slips back into recession and the US recovery is lackluster. Failure to
allow the plant to go forward in the face of environmental and other
opposition would likely be a signal to other foreign investors of the
government’s inability to fulfill its investment commitments.
The fight over the plant has implications well beyond either Malaysia or
its warring political parties. It would be the biggest such processing
plant in the world outside of China, which has faced a wide range of
environmental disasters and which has begun to close illegal mines. Most
other countries which produce rare metals stopped because of
environmental concerns, leaving China to produce more than 95 percent of
the world's rare earth metals, crucial for the manufacture of a wide
variety of products including wind turbines, disk drives, cell phones,
flat panel displays and many others.
But that has been at a monumental cost. The state-owned Xinhua news
service reported last year that of 12,523 tailings ponds from mines,
2,098 exhibited various safety problems. Wang Guozhen, a former vice
president of the government-linked China Nonferrous Engineering and
Research Institute, was quoted as saying some of the environmental
damage is so severe that it may never be possible to clear it up.
When China cut back on exports in an attempt to slow production to clean
up the country’s environment, the World Trade Organization ruled that
the country’s restrictions had violated global trading rules. The WTO
ruled that drove up prices and gave domestic firms an unfair competitive
advantage in raw materials including bauxite, coke, magnesium and zinc,
according to Reuters. While the 17 rare elements used in the high-tech
sectors weren’t included, Reuters reported, that led to hope that China
would scrap export limits on those elements as well.
Lynas, however, does not intend to mind rare earths minerals in
Malaysia. It intends to import ores from Mount Weld in Western
Australia, said to be the richest rare earth deposit on the planet. The
company plans to truck the ore to Fremantle, send it by containership to
Kuantan, then process it at the Pahang facility before exporting the
refined materials. The company said it chose Malaysia to process the
materials because labor and other costs are cheaper than they are in
Australia.
The fact that the company hasn’t figured out how to store the waste yet
has grown into a major concern. Some 700,000 people live within a 30-km
radius of the plant. Opponents also charge raised concerns over the
Malaysian government’s ability to monitor the plant because of the
history of the Bukit Merah plant.
However, the Lynas spokesman said, the progress in technology has been such that the process is now environmentally safe.
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