KUANTAN, Malaysia — The world’s largest refinery for rare earth metals has risen out of the red mud of a coastal swamp here and could soon obtain permission to operate — a step that would help break China’s near monopoly on rare earths but also worsen an emerging glut of some of these strategic minerals.
Yesterday’s big news was the World Trade Organisation decision against China’s appeal against their earlier ruling against China’s export taxes and restrictions. While the ruling specifically covers bauxite, zinc, yellow phosphorus, coke, fluorspar, magnesium, manganese, silicon carbide and silicon metal, it is widely though it might be used a precedent against China in similar export restrictions in the rare earth elements sector. With the subject widely and well covered elsewhere on this blog, I turned to yesterday’s other REE news, namely an article on Lynas in the New York Times.
The article brought up one major point I seemed to have missed. One of Lynas’s major contractors, AkzoNobel, pulled out of the Lynas Advanced Materials Plant project in Kuantan Malaysia over concerns about cracks and rising damp in the floor of the concrete-walled tanks.
Below how the NY Times covered that part in the article.
Rare Earth Metal Refinery Nears Approval
By KEITH BRADSHER Published: January 31, 2012
—–One setback for the Lynas project is that a crucial contractor, AkzoNobel, pulled out this autumn, according to engineers here and internal company e-mails. The Dutch chemicals multinational had a contract to supply important resins.
The resins are supposed to glue together dozens of fiberglass liners for concrete-walled tanks up to the size of double-decker buses. Hundreds of tons of rare earths with low levels of radioactive contamination will be mixed in the lined tanks with extremely corrosive acids at more than 200 degrees Fahrenheit.
The corrosiveness of acids increases steeply at high temperatures, which makes acids ideal for dissolving ore but difficult to handle.
AkzoNobel has long specialized in making some of the most esoteric resins for the mining industry. It uses a secret chemical formula to help the resins hold together fiberglass even under challenging combinations of heat and corrosiveness. The company said last spring that it would supply chemicals for the Lynas project only if it were certain that it would be safe.
Engineers involved in the project said, and internal e-mails showed, that AkzoNobel withdrew from supplying the chemicals after it was told that the fiberglass liners would be installed in concrete-walled tanks that have a problem with rising dampness in the floors and cracks in the walls. AkzoNobel had been in discussions about the problem of rising dampness, but only became aware of the cracks this autumn, according to the engineers and the memos.
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.
In an e-mail, AkzoNobel said that it was no longer supplying the project, but gave only a brief explanation of its reasons. “Due to changes in the project specification, AkzoNobel would only recommend the use of its linings on the project subject to the successful results of longer-term testing,” the company said. “That testing cannot be completed within the current project time scale.”
Mr. Curtis, the chairman of Lynas, confirmed that AkzoNobel had pulled out of the project but he insisted that it was not for safety reasons. He declined to elaborate but said that Lynas had found a new supplier for the resins, which he declined to identify.
Engineers involved in the project said that Lynas was building costlier steel-walled tanks for a second phase of the factory, which would avoid the need for concrete-walled tanks with fiberglass liners. Mr. Curtis denied this, and said that all of the separation tanks and piping at the factory are safe and meet international and Malaysian standards.
“They are appropriately engineered,” he said in an interview.
Will this article help or hinder Lynas in getting their first temporary operating licence? I’d have to say it hinders, since even if this issue has already been addressed by Lynas, it will raise again the issue of safety among the local population against the LAMP refinery. Whenever the go ahead is given, this issue is certain to be raised in lawsuits attempting to rescind the permission. At the very least this AzkoNobel issue is likely to interest the court. With the refinery “risen out of the red mud of a coastal swamp”, any issue of the integrity of the tanks is likely to be taken seriously by the courts. Perhaps some of the shareholders might like to comment.