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Thursday, March 31, 2011

Lynas Rare Earth Mining in Malaysia

Australia-listed Lynas Corp Ltd had received approvals to build a rare earth refinery in Australia and China but had picked Malaysia as the “preferred location” given its “proximity to market, access to high quality chemicals, utilities and engineering skills' coupled with its transparent regulatory framework,” said the company.

Lynas said it had initially obtained all approvals for this project in Australia but several factors in the country made it not favourable such as water shortage, difficulty of finding a suitable location that met with all its required infrastructure needs, lack of industrial land and port capacity, short supply of engineering and construction skills and the relatively high costs.

China which produces 97% of the world's rare earth supply, according to Lynas, had previously approved its plan to set up the processing plant in the country but the Chinese government had later imposed export limits on all final products as well as export taxes. “The Chinese government now controls and restricts export of all rare earth materials and also applies import and export taxes of up to 25% specifically for rare earths. Lynas was unwilling to invest in China and then have the export of final products controlled by the Chinese government,” Lynas said.

In recent weeks, protests over Lynas' project in Kuantan have gained strong momentum; the project has drawn much flak on the back of concerns over its potential health and environmental risk from the radioactive waste. “By all international standards, the Lynas raw material is classified as safe, non-toxic and non-hazardous,” it reiterated.

According to Lynas, the project's operating expenditure is estimated at RM350mil a year while it expects to rake in export revenue of RM880mil a year. It said the project would create over 350 skilled and semi-skilled job opportunities.

In an attempt to clear the air, the supplier of rare earths said it had initially proposed to set up its RM1.3bil plant in Kemaman, Terengganu as per the advice of Malaysian Investment Development Authority (Mida) in 2006 and had designed the plant for that specific location, having obtained all relevant approvals from AELB, DOE and the Kemaman municipal council.

However, while waiting for the Terengganu government to allocate the land, Lynas said Mida had asked the company to consider relocating the plant to Gebeng, Pahang, which is where it is currently being built. Kuantan, the company elaborated, is well-equipped with multi-port facilities, available industrial land, plentiful water supplies, natural gas pipelines and stable electricity supply and it also has diverse chemical, high quality chemical supplies which the company can purchase from local companies.

“At no time did the Terengganu government reject approval for the Lynas plant.

“Lynas feels an obligation to respond to recent public statements made about the Lynas Advanced Material Plant in Malaysia statements we believe are factually incorrect, statements which are taken out of context, and statements which are misleading to the public,” it continued.
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The Lynas plant will process raw material sourced from its mine and concentration plant in Mount Weld, Western Australia which will be transported to the facility in Pahang.

“This is very different to the raw material processed at the Asian Rare Earth Plant in Bukit Merah which used tin mining tailings as its raw material. This contained high levels of thorium, which was the source of high levels of radiation, and ultimately this plant's closure.

“Under current regulations, the raw material processed at Bukit Merah could not be processed in Australia, Malaysia or China today,” it said, adding that by contrast, the Lynas raw material contained naturally low levels of thorium 50 times lower than the tin tailings used by Asian Rare Earth.

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