Malaysia

Putrajaya should probe not dismiss NYT’s Lynas report, says Fuziah

By Shannon Teoh
June 30, 2011

KUALA LUMPUR, June 30 — Kuantan MP Fuziah Salleh flayed the Najib administration today for dismissing offhand a New York Times report claiming that Lynas Corp’s rare earth plant in Gebeng is being plagued by design problems and hazardous construction issues.

The PKR vice president said that it was unsurprising that the company made a swift denial of the NYT article after the government had appeared to ignore the claims in the article published today.

“MITI is responsible for bringing in the plant and it is the government’s duty to monitor and regulate it. How can they pass the buck straight to Lynas?” said Fuziah, who has been leading the charge against the controversial RM700 million plant that has raised fears of radiation pollution in and around her constituency.

Regulators Atomic Energy Licensing Board (AELB) had refused to comment on the report while International Trade and Industry Ministry (MITI) secretary general Datuk Rebecca Sta Maria had said in a press conference this morning that she had read the article and would leave it for Lynas to comment.

Lynas Corp boss Nicholas Curtis also rubbished the article in a press conference this afternoon stating that “there is no truth at all to the report. All engineers that are involved in this operation are now completely comfortable with the technical solutions.”

The NYT report coincided with the announcement by the federal government that a month-long review by a team of international experts had found that the refinery was safe according to international standards.

But the International Atomic Energy Agency-appointed (IAEA) panel recommended 11 improvements for Putrajaya to implement before awarding Lynas further licences, including the one the miner needs to start pre-operations.

The federal government has also pledged it will adopt all the suggestions while Lynas insists that it will still be able to begin operations by the end of the year.

Lynas has said that its plant — which will extract rare earth metals crucial for high-technology products such as smartphones, hybrid cars and wind turbines — will create a RM4 billion multiplier effect annually and will hire 350 skilled workers, 99 per cent of whom will be Malaysians.

Although reports say the plant may earn RM8 billion for Lynas, more than one per cent of the Malaysian GDP, critics have questioned the real economic benefit of the project, pointing to the 12-year tax break the Australian company will enjoy due to its pioneer status.

The federal government defended the Lynas project was a “strategic industry” for Malaysia in spite of the controversy it has attracted.

Sta Maria (picture, right) said the government expects Lynas to spend RM4 million a year, in addition to the RM700 million it has already poured into the rare earths plant.

It had previously estimated investment spinoffs of RM2.3 billion from the plant, including the RM300 million already poured into two factories in the Gebeng industrial zone that will produce hydrochloric and sulphuric acid needed to extract the rare earth metals.