Malaysia

Zambry says unaware of Bukit Merah rare earth deal

By Shannon Teoh
April 28, 2011

The chairman of PKNP said he was not informed of the agreement. — file picThe chairman of PKNP said he was not informed of the agreement. — file picKUALA LUMPUR, April 28 — Datuk Seri Zambry Abd Kadir will demand an explanation from a state firm after the Perak mentri besar said he was left in the dark over an agreement with a Hong Kong company to explore and mine for rare earths in the state made over a week ago.

Zambry stressed the agreement was “done at the agency level” and was only a memorandum of understanding (Mou) between the Perak State Development Corporation (PKNP) and Hong Kong’s CVM Minerals Limited.

However, the Pangkor assemblyman said the PKNP should have informed him before signing the MoU as the matter concerned public safety.

“The PKNP should have told me as this is a sensitive topic that concerns radiation and the health of the public. I will order it to brief me first thing tomorrow,” he told The Malaysian Insider late last night.

In a filing to the Hong Kong Stock Exchange on April 18, CVM Minerals Limited announced it had entered into the MoU with the PKNP to carry out the project in Bukit Merah, Ipoh, even as controversy rages over Australian miner Lynas Corp’s refinery in Pahang.

Bukit Merah was also the site of Malaysia’s last rare earths plant 20 years ago, which is still undergoing a massive RM300 million clean-up.

Environmentalists have raised questions over radioactive waste being produced and stored at Lynas’s Gebeng plant, fearing a repeat of the Japanese-owned Mitsubishi Chemical’s Asian Rare Earth (ARE) plant, which has been linked to eight cases of leukaemia, seven resulting in death.

When contacted, state executive councillor for industry, investment, entrepreneur development, tourism and women affairs Datuk Hamidah Osman also said she was unaware of the project.

Zambry, who as MB also chairs the PKNP, added any rare earth project in the state would be subject to the same standards required by the federal government that recently put the Lynas plant on ice after public outcry over potential radiation pollution.

He said in light of the nuclear crisis in Japan due to last month’s tsunami and the Bukit Merah plant, he was unhappy the PKNP had not informed him of the MoU with CVM.

The Hong Kong company, through its local subsidiary CVM Metal Recycle Sdn Bhd, has applied to the state’s land and mineral office for a licence to explore the area, covering 250 hectares, for rare earths.

CVM’s shares ended at HK$0.33, down 0.02 cents, on the HK stock exchange yesterday.

The company also said that the deal with Perak’s investment arm has yet to be sealed.

“As of the date of this announcement, no legally binding agreement has been entered into between the company and PKNP in relation to the formation of the joint venture,” CVM said in its filing.

PKNP is the Malay acronym for Perak’s investment arm. It was also announced that PKNP is interested in taking up 135.3 million of CVM’s shares, which is about 4.73 per cent of the company’s total shares issued.

CVM also said that it would be the major shareholder of the rare earths project in Perak, if the two parties do finally agree to ink the deal.

Bukit Merah is part of the area known as Belanja, which covers about 11,137 hectares in the Batu Gajah district and has a multiracial population totalling 26,211 people, according to the filing.

Putrajaya has ordered an international panel to review the Lynas project in Prime Minister’s  Datuk Seri Najib Razak’s Pahang home state. The panel results will decide if the RM700 million refinery can open in September as planned.