Dr M: Lynas should not be treated as an outcast

It will scare off foreign investors looking to invest in Malaysia, says Dr Mahathir


PRIME Minister Tun Dr Mahathir Mohamad has maintained his stance on Lynas Malaysia Sdn Bhd, saying that the company should not be treated like an outcast as it would send a false signal to foreign investors who are looking to expand their footprints in the country.

He reiterated that experts commissioned by the government had declared that Lynas’ operation is safe, amid strong local opposition who insist otherwise.

“We sent in experts to examine whether it is dangerous or not. Their report revealed that it is not dangerous…but the people who are against Lynas still want to get rid of the company.

“It is a big investment worth RM1.7 billion. It creates 700 high-quality, high-paying jobs. It is necessary for our investment.

“If we treat Lynas like a pariah and ask them to leave this country, we will not get other people to come to this country to invest,” Dr Mahathir told reporters after officiating the World Tourism Conference in Kuala Lumpur yesterday.

The 94-year-old leader also denied speculation that the favourable decision was made due to the company’s ties to Japan.

“It has nothing to do with Japan,” Dr Mahathir insisted.

Lynas Corp Ltd is the world’s only major rare-earth producer outside of China. The Australian-listed company 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 agreed to a US$225 million (RM946.57 million) loan to double Lynas’ plant capacity after supplies of Chinese rare-earth waste to Japan came to a halt following a maritime dispute the year prior.

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

The controversial rare-miner was granted a six-month operation extension by the Atomic Energy Licensing Board (AELB) on Aug 15, but it must adhere to strict conditions, including removing health hazardous operations to another country.

Under the six-month reprieve, the company must build a cracking and leaching facility in another country and cease all experiments related to the recycling of waste into soil conditioner in Malaysia.

Lynas is also disallowed from producing radioactive residue above one becquerel per gramme in Kuantan once the overseas plant starts its operation, which is expected to begin within four years from the validity of the licence.

The government also imposed that Lynas must commit 0.5% of its annual gross sales as collateral until its cracking and leaching facility begins operation.

The company is already required to identify an appropriate site to build its permanent disposal facility and obtain a written approval from the state for the project.

AELB expects a detailed plan on the facility, including the payment for construction and operational costs.

Meanwhile, commenting on the ongoing trade war between the US and China, Dr Mahathir reiterated his views on the futility of trade wars.

“I think trade wars are stupid. If you cannot agree on the deficits in your trade balance, you should negotiate…not boycott and things like that. It is very stupid,” he said.

Last Friday, US President Donald Trump announced tariff hikes on US$250 billion worth of Chinese imports to the US from 25% to 30%, effective Oct 1. It came after Beijing said it would impose fresh duties and raise tariffs on US imports into China.

Meanwhile, Reuters reported that Lynas is assessing its options for an initial processing plant in Mount Weld, Western Australia, as it looks to soothe concerns in Malaysia about radioactive waste.

Lynas has four years to build a plant that will remove low-level radioactivity from the material it ships to the SouthEast Asian nation for separation into elements vital for products ranging from fighter jets to wind farms.

Its VP of production Kam Leung said Lynas is well advanced in plans to build the plant, either by the mine or four hours’ drive south at the gold mining town of Kalgoorlie.

“We can do it all well within the four years. We are reviewing both and it will come down to an elimination process based on which site has the lowest risk,” he said.

Leung said the new plant, which will turn ore concentrate into rare-earth carbonate, would take around a year to construct, while the lead time for ordering equipment would also be around a year.

Mount Weld lies 20km south of Laverton, a town of 250 people, one pub, a hospital and a couple of shops, the last stop before Australia’s vast arid centre.

This red dirt-encrusted region is sprinkled with mines, mostly nickel and gold, interspersed by low scrubland where cattle graze and wild camels wander.

Lynas would apply for relevant permits concurrently and could also relocate some infrastructure from Malaysia.

Leung said the choice of site will be based on issues like access to water, transportation costs, availability of chemicals and skilled labour.

“I imagine we’d basically double our workforce, including contractors… we certainly would like to bring some of our Malaysian employees across. They’ve got years of experience,” he added.