Lynas project is turning into a battleground for govt

by ALIFAH ZAINUDDIN  / pic by AFP

THE Lynas issue has turned into a battleground, including within the Pakatan Harapan (PH) government. Detractors of the project continue to demand Lynas Corp Ltd to pull the shutter if it fails to ship the tonnes of radioactive waste stored in Malaysia back to Australia.

Proponents of the project are looking to balance between the financial fallout and benefits, especially when the Washington-Beijing trade war worsens and how rare earths have been dragged into the cold trade tiff.

The Australia-based company is hoping the government will renew its licence which sets to expire on Sept 2.

The government had previously imposed a strict condition on the management of the low-level radioactive waste generated from the rare earth processing plant in Pahang.

Prime Minister (PM) Tun Dr Mahathir Mohamad’s statement, that the government had removed the requirement for Lynas to send back the waste in order to have its licence renewed, had received mixed responses.

Dr Mahathir said the government had directed the mining firm to construct a permanent disposal facility to treat the water leach purification residue.

“We are giving this condition to Lynas that they should have a plan for dealing with the waste. We are waiting for them to tell us how they will do that. Whether they can find the place, whether they can dispose of the waste or not,” Dr Mahathir was reported as saying.

His statement on the withdrawal of the condition had drawn criticisms, including within the PH alliance.

Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin, who had insisted Lynas to send back the waste in the past, had described the recent decision as “better than the status quo”.

Lynas, which has been operating the plant since 2012, expects a decision on Aug 15.

Lynas opponents Kuantan MP Fuziah Salleh and Bentong MP Wong Tack have maintained that Lynas should not be allowed to operate its US$800 million (RM3.34 billion) plant if it continues to produce low-level radioactive wastes.

The PH government had promised before coming into power to bring the shutter down on the rare earths mined from Mount Weld in Western Australia and processed at the plant.

Fuziah, who is also deputy minister in the PM’s Department, recently said Japan was the beneficiary of the rare earths.

Wong Tack — an anti-Lynas advocate turned legislator — is pushing for a disclosure on federal revenue yielded from Lynas’ operation.

Reports, quoting sources, said the government is close to allowing Lynas to continue, but on a shorter licence period.

The rare-earth sector is turning into a gold mine with the investments estimated to reach up to RM100 billion in the next decade.

The US-China trade war had turned Lynas into a major supplier outside China, as Beijing put a stranglehold on the supply of the elements which are used in computers, smartphones and electric vehicles.

China, which produces over 80% of the world’s rare earths, decided to cut export quotas and implement a ban on shipments to Japan.

Lynas said its processing facility in Gebeng, Pahang, could meet up to 20% of global demand for rare-earth minerals.

Japan, a primary consumer of rare earths, is a powerful backer of the project.

In 2011, Japanese investors provided a US$225 million loan to double Lynas’ plant capacity after supplies from China came to a halt following a row over disputed islands between the secondand thirdlargest economies.

Uncertainty over the future of Lynas’ plant would incapacitate Japan’s downstream industries which heavily depend on rare-earth elements.

“Imagine the tangled position we are in now,” Fuziah said.

In 2018, the global rare-earth metals market was valued at US$8.10 billion and is expected to generate around US$14.43 billion by 2025, according to a report by New York-based Zion Market Research.

Malaysia, which has mineral resources worth an estimated RM732 billion, is also looking to develop the rare-earth industry as one of the country’s new sources of income.

Water, Land and Natural Resources Minister Dr Xavier Jayakumar last month said exploration efforts by the Mineral and Geoscience Department Malaysia have found sizeable amounts of rare earths in several states, including in Kedah, Perak, Johor, Kelantan, Terengganu, as well as Sabah and Sarawak, valued at RM178.14 billion.

Fuziah cautioned the government against so-called benefits from Lynas as the company has not paid a single sen in tax.

“What we get instead is a pile of radioactive waste that will affect our future generation,” she said. “It is not worth the trouble.”

Fuziah claimed the storage of nearly half a million tonnes of radioactive waste in Gebeng has caused a spike in heavy metal content in groundwater under Lynas’ plant.

Lynas denied all these allegations and said its wastes are safe and that the groundwater contamination was not due to its activities.

Public protest against Lynas has been ongoing since construction on the factory began in 2010. Many residents fear a repeat of the Asian Rare Earth Sdn Bhd (ARE) disaster in Perak.

The country’s last rare-earth refinery, operated by Japan’s Mitsubishi Chemical Corp, was closed in 1992 following protests and claims of birth defects and leukaemia.

Clean-up operations on ARE’s radioactive wastes are still ongoing over 20 years after the factory’s closure in 1994.

Protestors of Lynas’ refinery plant said concerns on health and safety must come first. Nandakumaran Kathirvaloo, a retired school principal, was quoted as saying: “We don’t want to be guinea pigs. We don’t want you to say 20 years later, ‘Oops. Sorry, we made a mistake.’”

Lynas welcomed Dr Mahathir’s announcement of requirement for Lynas to renew its licence. The company has also deposited US$42.2 million to finance the project.

Opponents of the rare-earth miner had threatened to hold a rally to protest the government’s decision to allow the company to continue to operate in the country, and for prioritising foreign investment over the well-being and safety of Malaysians.

Save Malaysia, Stop Lynas chairman Tan Bun Teet said protestors will “remember” the day and channel their dissatisfaction in four years’ time — in reference to the 15th General Election.

It is a decision which will split leaders within PH and public opinion as the government balances economic rewards and environmental concerns.