Part of the summary....PART 8SUMMARY OF LYNAS ADVANCED MATERIALS...

Part of the summary....

PART 8SUMMARY OF LYNAS ADVANCED MATERIALS PLANT (LAMP) OPERATING EXECUTIVE COMMITTEE COMMITTEE COMMITTEEIntroduction

1. The Executive Committee is in compliance with the Special Select Committee on the 2012 LAMP Project stating that based on scientific facts, the definition of law and information obtained from experts, the LAMP project is a chemical plant producing rare earths and not nuclear plants or mining activities. The Executive Committee also found that there were significant differences between the raw materials and residues produced by Asian Rare Earth (ARE) and LAMP (Please refer to Table 1, Special Select Committee Report on LAMP Project 2012, page 27).

2. The Executive Committee acknowledges that LAMP operations are based on controlled technologies and procedures with low risk, but to take account of the precautionary approach, LAMP needs to take additional steps in the handling of the resulting WLP and NUF residues to ensure the community and the environment the country continues to be preserved.

3. There is confusion among the general public in assessing the impact of radiation from the rare earths extracting plant containing Naturally Occuring Radioactive Material (NORM) as compared to nuclear plant or plant producing thorium or uranium. This confusion has caused various perceptions and annoyances of the public against the impact of radiation from the rest of the NORM compared with the radioactive waste.

4. Based on the terms of reference provided, the Executive Committee summarizes the following matters:

Compliance to LAMP on Safety, Health and Environment Standards in accordance with the Applicable Laws

i. The Executive Committee finds generally the LAMP has complied with the rules set out under the major acts encompassing the Atomic Energy Licensing Act 1984 [Act 304], Environmental Quality Act 1974 [Act 127], Factory and Machinery Act 1967 [Act92139], Occupational Safety and Health Act 1994 [Act 514] and the Industrial Co-ordination Act 1975 [Act 156].

ii. The Executive Committee finds that LAMP's investment meets quality investment criteria of high technology industries, establishing value chains for industries, capital-intensive, export-oriented, high value-added products, emphasis on R & D and create high-performance jobs with skills and knowledge-intensive jobs.

iii. The Executive Committee finds that LAMP has taken additional initiatives in order to comply with other voluntary international standards and practices.

Scheduled Waste Management and Scheduled Waste Generated by LAMP

i. The Executive Committee found that the LAMP operation produced two major types of residues, namely Water Leached Purification Residue (WLP) containing NORM and Neutralization Underflow Residue (NUF) categorized as scheduled waste materials at very high quantities.

ii. The Executive Committee found that LAMP had conducted a recycling study for both waste residues namely WLP and NUF. However, the commercialization of the product has yet to be implemented as it requires further research.

iii. The Executive Committee recommends that LAMPs need to IMMEDIATELY prepare and build safe storage sites for NUF residues by ensuring that all processes and procedures set forth under the Environmental Quality Act [Act 127] and the regulations below are fully complied with. For this purpose, the LAMP shall prepare an Environmental Impact Assessment (EIA) Report based on the Second Schedule of the Environmental Quality (Prescribed Activities) Environmental Impact Assessment Report 2015.

iv. The Executive Committee recommends that the LAMP need to IMMEDIATELY determine the location and build a permanent disposal facility (PDF) for the residual WLP. Site screening works for PDF construction should be made before the renewal of the next license, without having to wait for the results of the review on recycling. This is because taking into account the risk of accumulating residues accumulated on the site and93exposed to any threats due to climate change and natural disasters due to climate change. For this purpose, the LAMP shall prepare the Environmental Impact Assessment (EIA) Report based on the Second Schedule of the Environmental Quality (Prescribed Activity) Environmental Impact Assessment 2015 and Radiological Impact Assessment (RIA) based on the Atomic Energy Licensing Act 1984.

v. The Executive Committee recommends that all studies on recycling of NUF residues without involving WLP residues may continue.

vi. The Executive Committee recommends creating an Independent Research and Development Committee (R & D) that coordinates, evaluates, determines and monitors the study to ensure that the research is free from any conflict of interest from the LAMP. The R & D Committee also needs to look at and evaluate the aspects of commercialization of the products produced.

vii. The Executive Committee recommends an allocation of 1% of gross sales annually for R & D purposes as a condition of the license, to be submitted for operation by the proposed independent R & D Committee. The scope of R & D will be expanded to include the development of downstream industries as well as other areas covering health, social sciences, socio-economic, entrepreneurship and others. The LAMPs are encouraged to carry out studies to reduce the residuals produced by looking at process improvement and modification to reduce emissions based on residual waste management hires that specify the reduction of waste as a primary hiraki.

viii. The Executive Committee recommends that LAMP be prepared to bring out WLP residues from Malaysia if the PDF location is not identified or disapproved. In this regard, the Executive Committee noted that Lynas Corporation Ltd., Australia and Lynas Malaysia Sdn. Bhd. have submitted their respective letters dated February 23, 2012 and March 6, 2012 which inform the commitment to bring out LAMP residues from Malaysia (Please refer to the Special Select Committee Committee Report on LAMP 2012, page 64, para 16).ix. The Executive Committee finds that LAMP must comply with a financial guarantee requirement of USD50 million paid to the government94Malaysia in installments for Decommissioning and Decontamination (D & D) purposes. The Executive Committee recommends that the value of collateral be reviewed by LPTA to meet current financial needs from time to time. The same is recommended in the International Atomic Energy Agency (IAEA) Report 2014 and guidelines on the Management of NORM Residues 2013 issued by the IAEA.