Monday, 16 July 2012

Lynas Rare Earth Extraction Plant: Another Malaysian Solution

"I'm on my way to visit my pregnant wife in the hospital," grins Aaron, as he offers me a lift towards Kuantan, in Pahang, Malaysia.

With an elated grin and futsol shoes tucked under the seat of his old Proton, Aaron, 31, seems indefatigable. Until he learns I am aspiring to be an Australian journalist.

He immediately tells me about a group called "Save Malaysia Stop Lynas." Lynas is an Australian company with a business idea. They are building the largest rare earth extraction plant outside of China. And they are operating in Aaron's backyard. In fact, there are about 700,000 people living within a 30km radius of the plant.

At first glance the plot seems simple: big corporation uses third-world country to do its dirty work.  But there are two sides to every coin. IPhones, solar panels and chemotherapy are just some of the uses for rare earth metals. And Lynas is boasting a stellar workplace safety record. And taking extreme pains to adhere to Malaysian safety standards. This is a business venture that cannot afford to make mistakes.

Initial research shows that rare earths metals extracted during the process are not, in and of themselves, more harmful than any other mineral extract.  A report published by the US National Institute of Health states that, although the dust from rare earth metals seems to cause higher instances of pneumonia, the materials did not cause liver or fetal damage. Their experiments included injecting rare earth metals directly into animal foetuses. The report concludes with the chilling reminder that there should be more study into the effects of rare earth metals, especially as they are used in cancer treatment.

What concerns Aaron and other locals is the byproduct of the extraction process: a radioactive element known as thorium. Aaron reported that "local consultation" included government scientists telling them that the thorium byproduct would produce less radioactive material than sex.

"After hearing this, I didn't want to have sex," jokes Aaron.

Jack Lifton, an authority on end-use trends of rare metals, describes the thorium byproduct as the 800 pound gorilla in any rare earth venture. Rare Earth Investing News explains that this nuclear liability may soon be viewed as an asset: uranium-enhanced thorium reactors cannot be used in fission-based nuclear weapons. Countries such as Canada are already experimenting with this weapon-free possibility. However, another nuclear meltdown like Fukushima risks reducing interest in developing the thorium byproduct. 

Lynas is aware of the delicate issue and plans to dispose of thorium by mixing it with lime. Next, they will encase the diluted thorium in concrete and use it for artificial reef systems and sea walls.

But Aaron is worried that the government will be lax in enforcing safety standards. This worry is not unfounded: residents of Bukit Merah, Malaysia fought a 30-year battle to have a Mitsubishi rare-earth processing plant removed.  Mitsubishi is engaged in a $100USD million clean-up of the site, but residents are concerned that their children are feeling the effects of the radioactive material. Eight children have been born with leukaemia in the last decade, the projected rate for a town of Bukit Merah's size is one case every 30 years. Even last year, Mitsubishi was quietly removing radioactive material that was left behind in 80,000 200-litre drums.

So the residents of Pahang, Malaysia are campaigning for change. In fact, over 20,000 Malaysians have joined the movement. But the campaign has landed in trouble. At 4pm this Thursday, the Mayalsian High Court will hear a case against SMSL. Lynas is suing the group for defamation. If SMSL loses the case, they must immediately take down their March 22 blog entry.

In their blog, SMSL lists the reasons why locals oppose the plant. And why countries like Indonesia and the Philippines refused. Meanwhile, the Malaysian parliament granted a temporary operating license to Lynas last month. Aaron contends the politicians are stalling on making a permanent decision until after the upcoming elections. 

Last month, Crikey reported that Lynas Corp (LYC) may build a similar rare earths processing plant in WA. Dr. Matthew James, Lynas’s Director of Corporate Communications has stated that “the raw material from Mount Weld has thorium levels 50 times lower than the tin tailings used in the old Mitsubishi plant" and the concentrate-which will be shipped to Malaysia-will be “safe, non-toxic and non-hazardous.”

Lynas, meanwhile, has hired over 90% of the Kuantan plant workforce. They are simply waiting for the final OK from Malaysian officials. Aaron has relatives who work at the plant, and confirms the workers wear protective gear. However, the workforce has many poor immigrants from overseas countries like Myanmar. Locals are less enthusiastic about the opportunity.

The SMSL campaign has become the largest environmental campaign in Malaysia, and last weekend there were mass protests- across Malaysia and in Sydney, Melbourne, Perth and other Australian cities.

The tale has us spellbound, but we arrive at our destination. As Aaron drops me off in Kuantan, I have one more important question, "Boy or girl?" 

"We don't know yet, but it's going to be my first. I am hoping for ... a girl,"  he replies excitedly. Some of the sparkle leaves his eyes as he corrects himself, "... a healthy girl."

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