Malaysian Environmentalists Lead Opposition to Rare Earth Processing Facility

With the price of rare earth elements due to China’s de facto monopoly now running at more than $100,000 per tons of unprocessed ore, it would seem that countries would be lining up to attempt to gain a piece of the action.

Many are, with operations extending from Estonia to Mongolia.

While the 17 elements, are not in themselves radioactive every global rare earth ore deposit is found amongst radioactive thorium deposits.

But the Third World model of attracting foreign investment, even in so rich a potential investment has aroused environmental concerns in Malaysia over the effects of such operations, throwing the classic model of Western dominated capitalist development into disarray.

On 9 October 1,000s of Malaysians demonstrated against plans to open a $230 million rare earth processing facility in the country’s eastern resort town in Kuantan, concerned about possible environmental damage.

Activist Tan Bun Teet said, “We deserve a healthy environment for our future generations. The government can't just build anything in the name of development.”

What is intriguing about the protest is that the rare earth elements (RREs) initially are to come from Australia. The Lynas Advanced Materials Plant is scheduled to start processing rare earths imported from Australia, to be used in high-tech products from iPods to Toyota Prius automobiles to U.S. cruise missiles.

Australian miner Lynas Corp. owners of the Lynas Advanced Materials Plant insists that the project would be beneficial, with Lynas Corp. executive chairman Nick Curtis stating that China’s 2010 decision to temporarily block shipments to Japan over a political dispute reinforced the importance of creating other supply alternatives.

If all goes according to plan then as many as 2,500 construction workers will soon be constructing the world’s largest rare earth metals refinery in Kuantan, the first rare earth ore processing plant to be built outside China in nearly 30 years. According to Lynas Corp., then the Kuantan facility will refine slightly radioactive RRE ore from the Australia’s Mount Weld after it is trucked to Australia’s Fremantle port for transportation by sea.

Malaysian Atomic Energy Licensing Board director general Raja Dato Abdul Aziz bin Raja Adnan, said that Malaysia approved the Lynas project only after an interagency review indicated the imported ore and subsequent waste would have low enough levels of radioactivity to be manageable and safe.

Malaysia’s environmentalist opposition to RRE mining is not new. In 1992 Malaysia’s RRE refinery, operated by Japan’s Mitsubishi Chemical, was shuttered, and the mine site is now one of Asia’s largest radioactive waste cleanup sites. Reviewing the experience Raja Adnan said, “We have learned we shouldn’t give anybody a free hand.”

During the 1990s Japan closed its RRE mines and Mitsubishi moved its refining operations to Malaysia to reprocess waste from old tin mines rich in RRE ore byproducts, which also contained extremely high levels of radioactive thorium.

Even one of the RREs’ prime markets, the U.S. Defense Department, has acknowledged its processing environmental legacy. In 2010 United States Army’s Foreign Military Studies Office analyst Cindy Hurst wrote in her “China’s Rare Earth Elements Industry: What Can the West Learn?” report , “Every ton of rare earth produced generates approximately 8.5kg of fluorine and 13 kg of dust… Using concentrated sulfuric acid high-temperature calcination to produce approximately one ton of REE generates 9 600 to 12 000 cubic meters of waste gas – containing dust concentrate, hydrofluoric acid, sulfur dioxide and sulfuric acid; approximately 75 cubic meters of acidic wastewater, and about one ton of radioactive waste residue.”

So, at the end of the day, the issues for Kuala Lumpur are simple – do the short-term profits of weakening China’s RRE monopoly of RRE production outweigh the long-term environmental consequences?

No clear answer has yet to emerge – but local opposition is mobilizing and the issue is increasingly whether Malaysia’s example will now be emulated by other developing governments interested in enhancing their bottom lines while being courted by Western mining concerns.

When does a purported good thing turn into something else?

By. John C.K. Daly of Oilprice.com