PSC gives Lynas plant the green light
KUALA LUMPUR, June 19 — Australia’s Lynas Corp is set to clear the final hurdle for its delayed US$800 million (RM2.5 billion) rare earth plant after Malaysian lawmakers asked the government to issue the miner a temporary operating licence despite community safety concerns.
The recommendations of a six-member parliamentary select committee will be debated later today, but any objections or a possible walkout by the opposition will do little to prevent the findings from being approved.
This will clear the way for Lynas to operate the plant in Kuantan that is seen as key to breaking China’s grip on rare earths used in products ranging from Apple Inc’s smartphones to Honda Motors’ hybrid cars.
The decision by the committee, dominated by MPs from the ruling Barisan Nasional (BN) party, came after Malaysia last week dismissed an appeal by residents to scrap the plant on concerns of radiation leakage.
The Lynas plant, set to be the biggest in the world outside China, has been standing ready to fire up since early May, but the company has been embroiled in lengthy environmental and safety disputes with local residents.
Since construction began two years ago, the project has faced widespread protests across the country — drawing thousands of people at a time — over possible radioactive residue, and has become a hot election topic this year.
Opposition lawmakers boycotted the committee set up three months earlier, accusing the government of planning a whitewash over the Lynas plant in Prime Minister Datuk Seri Najib Razak’s home state of Pahang.
“The parliamentary committee’s findings will blow up the Lynas issue for many voters who were against the plant,” said James Chin, political science professor at Malaysia’s Monash campus. “There will be some form of a backlash.”
Najib is seeking a strong mandate in snap polls likely this year based on a track record of drawing in investments and boosting growth at a time when the euro zone debt crisis hobbles the global economy.
Lynas, which last year said refined rare earth exports from Malaysia could hit RM8 billion from 2013 — equivalent to one per cent of the country’s gross domestic product, could figure prominently in Najib’s plans.
The MPs today said awarding the licence would help the factory start processing rare earths in stages and recommended for a committee of NGOs and experts to keep track of the plant.
“The committee is satisfied the Lynas Advanced Materials Plant (LAMP) has met all the necessary standards and laws in Malaysia,” the report said. “Even so, there have been legal requirements and standards imposed on the LAMP project that were more stringent than international standards.”
The 100-page report said while Lynas had met safety, health and environmental standards, an additional 31 recommendations will be tabled in what appears to be concessions to public concerns over the plant’s safety aspects.
Key among them is a recommendation Lynas has to ship out factory waste from Malaysia if it is unable to find an approved storage and recycling site — a sticking point for green groups, opposition parties and local residents.
“The committee wants to inform that Lynas Corporation and Lynas Malaysia have written letters expressing their commitment to removing LAMP residue from Malaysia,” the report said.
Lynas has said demand is so strong that it has locked in customers for all the rare earths it can process in the first 10 years of operations. — Reuters