GEBENG, Malaysia (Reuters) - The expensive machinery lies silent, idling as Malaysia'sgovernment weighs a delicate decision to allow shipments of rawmaterial to arrive from Australia and finally start operations atthe world's largest rare earths plant outside China. At the industrial estate on the country's east coast, 20 or soprotesters gathered in the searing afternoon heat have begun achant. "No to Lynas. Lynas go home!". The handful of demonstrators seems an unlikely obstacle to plans byAustralia's Lynas Corp to build its company-making 2.5 billionringgit ($800 million) plant, seen as crucial to challengingChina's near monopoly on the production of rare earths, used initems ranging from smartphones to smart bombs.
But the expanding protest movement they represent, feeding offbroader frustrations with Malaysia's government as elections loom,has already delayed the project by eight months and cast a shadowover its future. The resistance - fed by social networks and Malaysia's increasinglylively independent online media - also raises broader questionsover the global expansion of an industry that has created hugeenvironmental problems in China, which currently accounts for about95 percent of global supply. "Western countries don't want it. Why should we in Malaysia?," saidNorizan Mokhtar, who lives less than 10 km (6 miles) from the plantin the industrial area of Gebeng, close to fishing villages andKuantan, a city of half a million people. "My youngest is six, the effects might not be seen now but in thefuture.
We eat fish everyday, what if there is radiation?" She's afraid controls on the plant will become slack after thefirst few years. Lynas has been plagued by delays and controversy in Malaysia sinceit broke ground on the plant two years ago with the aim of easingChina's grip on the supply of rare earths and capitalising onrising prices for the material. Its share price has halved since early last year as investors worrythat it will lose out in the race to feed surging world demand. Lynas has orders covering its first 10 years of production.
Japan,the world's biggest consumer of rare earths, is counting on Lynasto supply 8,500 tonnes a year by early 2013. "Our customers are waiting," Mashal Ahmad, the managing director ofthe Lynas plant, told reporters during a tour of the plant formedia last month. "We have nothing to hide," he said, adding that "too muchmisinformation" had been spread about the company. CAUGHT OFF-GUARD Prized for their magnetism, luminescence and strength, worldconsumption of rare earths is estimated to rise to around 185,000tonnes a year by 2015, from 136,000 tonnes in 2010.
China imposed export quotas in 2009 to fight pollution caused byillegal mining and processing, turning up the pressure to findalternative sources. The Lynas plant is one of a handful under construction. It is 98percent complete and would supply about 11,000 tonnes in its firstyear, eventually rising to 22,000 tonnes. Elsewhere, Canada's Great Western Minerals is teaming up with aChinese group to build a rare earth processing plant in SouthAfrica, while U.S. firm Molycorp is set to churn out just under20,000 metric tons of rare earth oxide this year at its site nearCalifornia's Death Valley.
The Malaysian protest movement gathered strength last year afterallegations - denied by Lynas - that it was cutting corners onsafety, fanning fears that radioactive run-off from waste materialstored at the plant could seep into the local water system afterbeing chemically treated. An estimated 8,000 people rallied against Lynas in Kuantan inFebruary and the issue has been seized on by the country'sopposition to show the government is out of touch with citizens'concerns. Malaysia's government at first showed few signs of heeding theprotesters' concerns, but it appears to have been caught off-guardthis year by the strength of opposition to the plant as it preparesfor a closely run election within months. Pahang, the state where the plant is being built, is a keystronghold for the long-ruling Barisan Nasional coalition that itcan ill-afford to lose. Responding to lobbying by citizens' groups,the government set up a parliamentary select committee in March tolook into the safety of the plant, after halting a conditionaltemporary operating license granted in February.
A decision is expected after the committee presents its findings atthe end of June. Prime Minister Najib Razak has vowed the government will not allowLynas to operate the plant if there is any doubt over its safety.But he must also weigh the costs of sending a negative signal toforeign investors as he tries to reinvigorate the economy of theSoutheast Asian country. "We will never compromise the safety of the people and theenvironment," he said in a radio broadcast last month. Lynas officials say they are confident the plant will win approvalin coming months. Opponents suspect the government is waiting untilafter the election to approve the plant at a less sensitive time.
"The timing could be all too convenient," said Fuziah Salleh, alocal opposition member of parliament who has thrown her weightbehind the protest movement. "Basically it is a delay tactic untilapproval." Fuziah and leaders of the protest movement "Stop Lynas, SaveMalaysia" say they will continue to fight against Lynas in thecourt if it wins approval, signalling more uncertainty ahead. The opposition - which made historic gains in 2008 polls and has anoutside chance of winning the next election - has said it willscrap the Lynas project altogether if it takes government. TAINTED HISTORY Opponents say the Lynas plant doesn't meet with best practicestandards for the industry as it is too close to heavily populatedareas and in a place where the ground water level is high.Molycorp's plant in California, by comparison, is situated far fromresidential areas in an arid climate.
"There never was any public consultation before the building of theplant got underway. I faced resistance from the start," saidFuziah. If the protesters' views are trenchant, then Lynas' resolve is alsohardening. The company has started legal action against a Malaysiannews portal and a protest group for defamation.
Rare earths have a tainted history in Malaysia. In 1992, a unit ofMitsubishi Corp closed a rare earths plant in Bukit Merah in Perakstate amid acrimony over radioactive contamination. Residents ofBukit Merah say they have suffered a high numbers of birth defectsand leukemia. Lynas says comparisons with Bukit Merah are unfair because the rawmaterial there was over 40 times more radioactive than theconcentrate to be used at its plant.
It says commercial - not environmental - reasons brought it toMalaysia, where the government has granted the company "pioneer"status, giving it a 10-year tax holiday. Lynas says it has added earthen fill to the site for the storagefacility to double the distance between waste products and thewater table to 4.1 metres (14 feet). The waste will contain low levels of thorium, a radioactivechemical which can cause cancer, but the concentration of thoriumis very low and stays low, it says. But it isn't clear how long the waste matter will be stored at theplant. Lynas says its storage facility has been built to a standardthat would allow the waste to be stored permanently, although itonly expects storage for 17 or 18 years.
It hopes to sell the wasteas a base for road construction after reducing its radioactivityconcentration to safe levels. Treated waste water from the plant will go into the Balok river atan average rate of 213 cubic metres (7500 cubic feet) per hour,raising concerns about the impact on marine life and on thelivelihoods of the fishermen along the coast. Officials at Lynassay the concerns are unfounded and the discharged water will meetwith Malaysian regulations. From her perch close to the Balok river, Kak Su, who sells thedaily catch local fishermen bring in, smiles quietly. She isresigned to her fate.
"The government will decide, I don't think they'll make a baddecision," she says. "I don't think the protesters will getanywhere," she adds. Thomson Reuters 2012 All rights reserved SUBSCRIBE to Mineweb.com's free daily newsletter now. I am Consumer Electronics writer, reports some information about motorola v3 faceplate , typing tutor games.
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