Malaysia

Twenty years on, Malaysia makes another rare earth bet

By Shannon Teoh
March 09, 2011

A worker waters the site of a rare earth metals mine in Jiangxi. China holds a virtual monopoly on rare earth supply. — file picA worker waters the site of a rare earth metals mine in Jiangxi. China holds a virtual monopoly on rare earth supply. — file picKUALA LUMPUR, March 9 — Malaysia is gambling on a new processing plant in Kuantan to produce metals possibly worth over RM5 billion a year, nearly two decades after protests forced Mitsubishi Chemicals to close down a rare earth plant near Ipoh due to environmental damage — damage which it is still trying to clean up today.

A New York Times (NYT) report said today Australian mining company Lynas’s refinery in Kuantan could break China’s chokehold on rare earth metals that are crucial to high technology products such as Apple’s iPhone, the Toyota Prius and Boeing’s smart bombs, said the newspaper.

“If rare earth prices stay at current lofty levels, the refinery will generate US$1.7 billion (RM5 billion) a year in exports starting late next year, equal to nearly one per cent of the entire Malaysian economy,” the newspaper said.

“But as Malaysia learned the hard way a few decades ago, refining rare earth ore usually leaves thousands of tons of low-level radioactive waste behind,” it added, referring to a plant in Bukit Merah.

The Bukit Merah Asian Rare Earth plant near Ipoh was also reported by the New York Times to be still quietly undergoing a US$100 million cleanup exercise despite shutting down in 1992.

The New York Times reported that as many as 2,500 workers are rushing to complete a US$230 million plant in Gebeng, near Kuantan, that will refine slightly radioactive ore from Australia.

It said it will be the first such plant outside China in nearly three decades as the rest of the world became wary of the environmental hazards, leaving China to control 95 per cent of global supply of the rare metals.

Beijing’s recent moves to limit exports of rare earth has propelled world prices of the material to record highs, sending industrial countries scrambling for alternatives, the report continued.

This has spurred Australian mining company Lynas to rush the refinery, which it says will meet nearly a third of the world’s demand for rare earth materials.

According to the NYT, the Malaysian government was eager for the investment by Lynas, even offering a 12-year tax holiday.

It quoted Raja Datuk Abdul Aziz bin Raja Adnan, the director-general of the Malaysian Atomic Energy Licensing Board, who said the project was only approved after an inter-agency review.

He said the report indicated that the imported ore and subsequent waste would have low enough levels of radioactivity to be manageable and safe.

“We have learned we shouldn’t give anybody a free hand,” Raja Adnan told the newspaper.

However, toxicologist Dr. Jayabalan A. Thambyappa, who has treated leukaemia victims whose illnesses he and others have attributed to the Mitsubishi plant, contends that low or not, exposure to such material remains hazardous.

“The word ‘low’ here is just a matter of perception — it’s a carcinogen,” said Dr Jayabalan.

The Bukit Merah plant was opened by Japanese company Mitsubishi Chemicals in 1985, before being shuttered in 1992 following years of protests by residents concerned with pollution, the NYT said.

Rare earths, a group of 17 elements found near the bottom of the periodic table, are not radioactive themselves.

But virtually every rare earth ore deposit around the world contains, in varying concentrations, a slightly radioactive element called thorium.