Malaysia

Lynas plant on hold as government forms review panel

By Shannon Teoh
April 22, 2011
Latest Update: April 22, 2011 11:34 pm

KUALA LUMPUR, April 22 — The government has bowed to public pressure over the controversial rare earth plant in Kuantan, and announced today a panel of independent international experts will review the RM700 million refinery that has raised fears about radiation pollution.

Minister of International Trade and Industry Datuk Seri Mustapa Mohamed (picture) said the panel will be appointed “in a few days” to review the plant being constructed by Australian miner Lynas Corp in the Gebeng industrial zone.

He stressed that until the federal and Pahang state government decided on the panel’s findings, “no pre-operating licence will be issued to Lynas... no importation into Malaysia of raw materials from Australia.”

Environmentalists and Kuantan residents have raised questions over radioactive waste being produced and stored at the plant, fearing a repeat of the last rare earth factory in Bukit Merah, Perak, which has been linked to eight cases of leukaemia, seven resulting in death.

After being shuttered due to public protest over radiation pollution in 1992, the refinery is still undergoing a cleanup process that is costing over RM300 million.

Pressure from their constituents has also pushed Pahang MCA leaders to call for a review of the plant that was expected to begin operations in September.

Mustapa insisted the government’s latest move will not affect investor confidence despite the RM700 million being called into review at the eleventh hour.

“It will not affect investor confidence because they are just as mindful of the environment as we are. In fact, this move will boost confidence,” he told a press conference here.

The minister said the panel will be multi-disciplinary, but still focus on radiation and safety aspects of the plant.

However, he refused to say who will foot the bill for the panel when quizzed over the credibility of the panel.

“They are experts. Who else are you going to trust?” he said, adding that he did not see “any harm” in making the panel’s findings public once the review was concluded.

The ministry’s secretary-general Datuk Rebecca Fatima Sta Maria said that this would not affect construction of the plant which is ongoing.

“But without any raw material, it means that nothing can happen,” she clarified.

Regulators Atomic Energy Licensing Board (AELB) said the panel would probably consist of between five and seven experts.

“They will be recognised by the International Atomic Energy Agency (IAEA),” said director-general Raja Datuk Abdul Aziz Raja Adnan, referring to the international body that reports to the United Nations on matters regarding radioactivity.

Lynas had expected to receive a preliminary operating licence from the AELB before September which will be renewed as a full licence within three years should the plant comply with agreed standards.

It is anticipating a windfall of RM8 billion a year from 2013 onwards from the rare earth metals that are crucial to the manufacture of high-technology products such as smartphones, hybrid cars and bombs.