Rare-Earth Miner Reiterates Plans to Move Part of Malaysian Operation Abroad

Updated at 4:26 p.m. ET on 2019-06-20

Australian rare-earths producer Lynas Corp said Wednesday its plan to move a portion of its ore processing plant out of Malaysia by 2025 addresses conditions imposed by Prime Minister Mahathir Mohamad for continuing operations in the Southeast Asian country.

Replying to questions from BenarNews, the company also reiterated that Malaysian workers had been exposed to radiation well below internationally accepted limits, amid lingering controversy over the safety of radioactive waste at its plant in Malaysia’s Pahang state.

“We announced on 21 May 2019 that we intend to relocate first-stage processing cracking and leaching – from Malaysia to Western Australia by 2025,” Lynas said in a statement. “This addresses the new conditions proposed by the Malaysian Prime Minister.”

The company’s confirmation about relocating part of the plant came as a ministry spokeswoman in Kuala Lumpur said the country’s energy and environment minister Yeo Bee Yin had delayed a planned June 20 visit to Australia.

Yeo had planned to meet in Perth with Bill Johnston, Western Australia state’s minister for mines, on Thursday, reports said.

Prime Minister Mahathir Mohamed in April said the government would renew Lynas’ operating license – set to expire in September – on condition it process radioactive ores prior to bringing them into the country, news portal The Edge reported at the time.

Speaking to reporters in Tokyo in late May, Mahathir said his government would continue to push Lynas to remove radioactive waste from Malaysia, but also look for other solutions.

“We are going to talk to them but if we fail, of course we need to do something with the raw material. Maybe spread it somewhere so as to not have concentrated radioactive material in one place,” he said. “We will allow Lynas to carry on or else we are going to lose a very big investment from Australia.”

Lynas, the world’s largest rare-earth producer outside of China, mines the minerals out of Mount Weld, a collapsed volcano in Australia, and ships them to be refined to a sprawling industrial complex in Kuantan, capital of Malaysia’s Pahang state. It employs more than 650 people in Malaysia and Australia.

Refining is done on a large scale in only two places: Malaysia and China, which has threatened to restrict the supply of rare earth minerals to the United States.

Activists said that while Lynas’ U.S. $800 million plant in Kuantan broke China’s near-monopoly on producing the prized elements, the processing also left behind low-level radioactive waste.

“The main issue is the disposal of waste material, which needs to be resolved urgently. If both governments cannot find a solution to this problem, then the industry will need to be phased out,” Randolph Jeremiah, vice president of Environmental Protection Society, a Malaysian NGO, recently told BenarNews.

‘Low Risk’

Rare earths are not actually very rare and are even more abundant in the Earth’s crust than copper, lead, gold and platinum, according to a U.S. Congressional Service (CSR) report.

But rare earths are not concentrated enough to make them easily exploitable economically, and refining them takes lots of corrosive chemicals and generates huge amounts of residue, scientists said.

Rare earths – minerals such as cerium, lanthanum and neodymium – are used in electronics and smartphones, wind turbines and electric vehicles, jet-fighter engines, Tomahawk cruise missiles, space-based satellites and communication systems.

The U.S. imports some $160 billion of rare earth materials from China, which controls 80 percent of the production. The ongoing trade conflict between Washington and Beijing has spotlighted the strategic significance and defense application of rare earth elements.

In its statement, Lynas said it welcomed Mahathir’s comments acknowledging the importance of its Malaysia operations.

It explained that one of the by-products of rare-earths processing is WLP, an iron phosphate that is a Naturally Occurring Radioactive Material (NORM).

“WLP residue is classified as very low-level waste under the International Atomic Energy Agency classification scheme,” it said.

Radiation exposure received by its Malaysia workers had been less than 2 millisieverts (mSv) per year, "well below the internationally accepted exposure limits," the firm said, referring to the 20-mSv threshold advised by the International Atomic Energy Agency.

In December 2018, the Pakatan Harapan government’s review of Lynas Malaysia found that its operations are “low risk, compliant with relevant regulations and that residue storage facilities are operated in a proper manner,” the statement claimed.

“As it is, there is no legal reason to shut it down,” Amlir Ayat, vice president of EcoKnights Malaysia, said of the plant. “However, there needs to be frequent and appropriate monitoring of the operations by the local and international bodies to ensure it is continuously safe.”

Another environmentalist, Shariffa Sabrina Syed Akil, told BenarNews that Mahathir’s government had erred by allowing Lynas to continue to operate in the Southeast Asian country.

“We know a smart country like Australia won't harm its citizens,” Shariffa said. “But Malaysia wanted more money and development by risking us with hazardous materials.”