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Protests Promised Over License for Malaysia Rare Earth Plant
By LIZ GOOCH
Published: September 6, 2012
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KUALA LUMPUR — Activists who have waged a lengthy campaign against a rare earth refinery in Malaysia refused to back down Thursday after the authorities gave the Australian company behind the project the green light to proceed.

One group has vowed to blockade the port in the Malaysian town of Kuantan, near the plant, if the company, Lynas, tries to import raw earth materials from Australia.

“We are prepared to paralyze the whole port until the raw materials leave our port,” said Wong Tack, chairman of the group, Himpunan Hijau. “The world will witness one of the biggest civil disobedience events in this nation.”

The Lynas plant has suffered several regulatory and construction delays as activists and local residents have held protests and have taken legal action over their concerns that the plant could produce harmful radiation. Lynas has strenuously denied that there will be any radiation hazards.

The Atomic Energy Licensing Board of Malaysia said Wednesday that it had decided to issue Lynas a two-year, temporary operating license because the company had met all technical and regulatory requirements.

The board initially approved the license in January but refrained from issuing it because Lynas had to fulfill additional conditions.

Lynas said that it would address the “principal cause of the community anxiety” — what to do with the radioactive byproducts from the plant — by turning the material into “processed co-products” for use mainly in manufacturing, like materials for roads and buildings. The materials would be exported, the company said. The company’s statement did not say to which countries it might export the products.

The company said Wednesday that it expected to begin processing rare earth concentrates at the plant in October.

The company’s share price rose Thursday on the Australian Securities Exchange, closing at 84 Australian cents, up more than 41 percent from the closing price Wednesday.

Nicholas Curtis, the company’s executive chairman, said in a news release that “like everyone at Lynas, I am eagerly anticipating the safe commencement of operations.”

Chris Terry, an analyst with Deutsche Bank in Sydney, said that the license was a “significant event” for Lynas.

“It’s something that the company has waited since February for, and without the operating license, Lynas wasn’t able to import concentrate from Western Australia or begin commissioning of the plant in Malaysia,” he said. “Over the last 12 months or so, there’s been delays to the plant construction, there’s been a delay in the issuance of the license and a slide in the rare earth price over the same time frame, which have all contributed to the downtrend in Lynas’ share price.”

Rare earths, which are used in a range of high-technology products, including smartphones, electric cars and military equipment, are found in nature with radioactive contaminants that must be separated and disposed of during refining.

Lynas says the waste produced in that process will be well within the limits of what is considered safe.

Mr. Curtis said that the temporary operating license had provided “additional validation of the safety of Lynas’s operations in Malaysia and supports the previous assessment by the world’s pre-eminent radiation safety authority, the International Atomic Energy Agency,” that the plant would be safe and fully compliant with international standards.

But activists are not satisfied that the plant, estimated to cost 2.5 billion ringgit, or $802 million, will be safe.

“We will not allow an ounce of raw material to reach our shores,” said Mr. Wong, adding that Himpunan Hijau would recruit “thousands of people” to block the port 24 hours a day when the raw earth material arrived.

“We need to send the strongest warning to Lynas — don’t even dream about operation. This is an all-out war,” he said.

Another group, Save Malaysia Stop Lynas, said it was considering filing for a court injunction to try to stop the plant from operating.

Tan Bun Teet, the group’s chairman, said Save Malaysia Stop Lynas had already obtained leave from the courts for a judicial review of both the Atomic Energy Licensing Board’s approval of the temporary operating license and of the decision by the minister of science, technology and innovation not to revoke the license.

He insisted that the board should have waited for the outcome of those judicial reviews before issuing the license.

The board said in a news release Wednesday that it was satisfied that Lynas had “fulfilled all technical aspects, including the institution of dust control measures and radioactivity immobilization methodologies in its residue management system, and all regulatory requirements.”

It added that the temporary operating license would allow Lynas to conduct “trial processing of lanthanide concentrates in stages and in limited quantities under close and continuous surveillance by the authorities.”

The refinery has become politically divisive in Malaysia, where elections must be held by June 2013.

The government set up a parliamentary committee this year to investigate the plant in response to public concerns, but opposition members of Parliament refused to participate.

The committee’s findings — that Lynas should receive the license because it had fulfilled legal provisions and standards more stringent than international standards — were dismissed by activists who claimed the committee was an attempt to “whitewash” the issue.