Malaysia

AELB says will wait on minister, signals more delays for Lynas

By Shannon Teoh
May 15, 2012

A general view of the Lynas plant in Gebeng. The company has said the plant would be ready to fire up operations within three weeks of receiving the go-ahead. — Reuters picA general view of the Lynas plant in Gebeng. The company has said the plant would be ready to fire up operations within three weeks of receiving the go-ahead. — Reuters picKUALA LUMPUR, May 15 — Lynas Corp’s license remains suspended as regulators await the science minister’s decision on an appeal, signalling further delays for the Australian miner that could push back the projected start date for its controversial rare earth plant.

The Atomic Energy Licensing Board (AELB) said tonight it had been ordered by Datuk Seri Maximus Ongkili to put on hold the issuing of a temporary operating license (TOL) to Lynas after receiving an appeal from three residents living near the Kuantan plant in February.

“The appeal hearing took place on April 17 and until a decision has been finalised by the minister, the order to suspend the TOL to Lynas continues to be in force,” AELB director general Raja Datuk Abdul Aziz Raja Adnan said.

Lynas had said last week it was on track to start up its rare earth plant in Malaysia next month after Datuk Seri Khaled Nordin, chairman of a parliamentary select committee on the refinery that has raised fears of radiation pollution, called it “the safest rare earths plant in the world.”

It also said in April delays in obtaining the license for its RM2.5 billion facility, which was initially approved in January, may have “very serious consequences” for RM80 billion worth of rare earth orders as it is “sold out for the next 10 years.”

The Sydney-based firm said last year the first phase of its plant, which was initially slated to fire up last September, will produce rare earth worth RM8 billion annually.

Prices for rare earths, highly sought-after for high-technology products such as smartphones, wind turbines and bombs, have since dipped slightly as the market reacted to record highs resulting from export quotas imposed since 2009 by China, which controls 97 per cent of production.

The new delay was triggered by an appeal from three residents living near the Kuantan plant. — Reuters picThe new delay was triggered by an appeal from three residents living near the Kuantan plant. — Reuters pic“I am not going to say how long we can last, but it has a very adverse impact,” Datul Mashal Ahmad, Lynas’ managing director for its Malaysian operations, said of the refusal by Putrajaya to hand over a TOL despite meeting regulatory standards on paper.

Local regulators Atomic Energy Licensing Board (AELB) had said in January it would approve a TOL, which allows Lynas to operate for an initial two years, subject to added conditions including identifying a suitable long-term waste disposal site.

This was despite Lynas insisting it can reprocess its residue, which it says has only very low levels of radiation, into safe commercial products.

Science, Technology and Innovation Minister Ongkili has said he will study the documents and testimony presented in the April 17 appeal hearing and will consult related experts and authorities before making a decision.

Lynas has said the plant would be ready to fire up operations within three weeks of receiving the go-ahead.

It has faced fierce protests over the past year from local residents and opposition politicians who say that the plant will cause radiation pollution despite the company insisting it has met and exceeded local and international safety standards.

But Mashal refused to say how long Lynas would wait for the TOL having already sunk RM1.5 billion into the first phase of its plant.

“I have full confidence. You invest where the rules and regulations are clear,” he said, adding that he had faith Malaysia would respect the rules and not “shift the goalposts”.