Protests threaten Lynas’s Malaysian rare-earths plant

April 25, 2011 (Source: The Australian) — Rare-Earths miner Lynas’s plans for a processing plant in Malaysia have been thrown into doubt as local authorities review the proposal in light of concerns about radiation pollution. 

The Malaysian government has announced it will create a panel of independent international experts to review the $US220 million ($205m) plant Lynas is constructing in the Gebeng industrial zone in Pahang.

The Minister of International Trade and Industry, Mustapa Mohamed, said until both the federal and Pahang state governments had decided on the panel’s findings, no pre-operating licence would be issued to Lynas and there would be no imports of Australian raw materials.

Mr Mohamed told a news conference on Friday that the safety of the Malaysian people came first. “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,” he said.

The government said the month-long review would not stop the construction of the Lynas plant, which is ongoing.

Lynas was quoted in international reports as saying it welcomed the announcement, adding that it believed the plant would be finished on schedule.

“The company is confident the review will reconfirm that the plant is safe and presents no hazard to the community or Lynas workers,” it said in a statement.

Lynas chairman and chief executive Nick Curtis was unavailable for comment yesterday, but the Australian-based company outlined on its website that the first feed of concentrate into the kiln at the Lynas Advanced Materials Plant (LAMP) was on schedule for the third quarter of 2011. The Malaysian refinery is to process the ores from Lynas’s Mount Weld mine in Western Australia.

“Lynas has received all required approvals to construct both the concentration plant in Western Australia and the LAMP in Malaysia. The LAMP meets all of the safety and environmental standards for Malaysia, as well as Australian and international standards,” the company said on its website.

Strong local opposition to the plant forced the government to take action, with angry protesters calling for construction of the refinery to cease.

A blog on a local website, The Star Online, said that if Lynas claimed the residue from the plant would be safe, it should be shipped back to Australia.

“Malaysia cannot afford to keep a health time bomb here and we do not know when it will explode,” the blog stated.

Concerned local residents fear a repeat of health problems associated with a Mitsubishi refinery, which closed in 1992 after years of demonstrations by citizens protesting about its polluting effects. A clean-up process is still under way at that site.

The recent damage to the nuclear power plants in Japan following the earthquake and tsunami have also heightened concerns about radiation risks around the plant, despite the fact that technologies used in rare earths processing differ to the utilities.

Lynas says the next step in the approvals process for the LAMP is obtaining the pre-operational licence, adding that it has already submitted the information required for that process.

Rare earths, a group of 17 elements, are not radioactive in themselves. But virtually every rare-earth ore deposit around the world contains, in varying concentrations, a slightly radioactive element called thorium.

China produces 90 per cent of the world’s rare-earths supply, but began cutting export quotas last year for the metals, which drove the price higher and has supported a rapid rise in the Lynas share price.

The company last month finalised a $US325m financing package to fast-track a phase-two expansion of its rare-earths project in Western Australia.