Thanks for your thoughtful and insightful posts. Tending to come around to your type of thinking on the PDF Aquaregia, but disagree with you on the associated risks for the Plant commissioning from both a waste perspective and operational perspective. Some insightful reading in these 3 articles. I have a feeling that the alternative supplier for the chemical resins may be BASF.......
Refinery on target for not so rare earth Keith Bradsher February 4, 2012
Safety concerns and other hiccups have not stopped progress, writes Keith Bradsher.
The world's largest refinery for rare earth metals has risen out of the red mud of a coastal swamp at the Malaysian city of Kuantan and has just gained a temporary licence to begin operating - a step that could help break China's near monopoly on rare earths but also worsen an emerging glut of some of these strategic minerals.
China's suspension of much-needed exports of rare earths to Japan during a territorial dispute in 2010 fed a bubble in the market that drove prices up 30-fold by last winter.
But prices have slumped by up to three-fifths since then for some of the 17 rare earth elements, which are vital to smartphones, wind turbines and other components of the modern economy.
The approaching completion of the Malaysian refinery, a series of more than a dozen sprawling buildings connected by a labyrinth of pipes, with the capacity to meet a fifth of the world's demand, has contributed to the plunge.
The progress towards opening the plant has occurred despite street demonstrations in Kuantan over radiation worries, regulatory challenges and the withdrawal of a major equipment supplier worried about the safety of the refinery, which is being built by Lynas, an Australian company.
The director general of the Malaysian Atomic Energy Licensing Board, Raja Dato Abdul Aziz bin Raja Adnan, said last week that it would be useful to issue the licence and then carefully monitor radiation levels at the refinery and in its waste, because he did not trust pilot-scale models designed to predict how the refinery would operate.
''We still have the right to stop them and suspend and terminate'' if the refinery is not running safely, he said. The board also had no obligation to notify the public of its decision, and might not even notify Lynas immediately either, he said.
Fuziah Salleh, an opposition-party lawmaker from Kuantan who has fought the refinery, said opponents of the project planned to file a lawsuit in the coming weeks in a last attempt to stop it. Critics filed more than 1000 objections to the project on Thursday, the last day for public comments, partly in the hope the board would delay action to read them.
Despite the drop in prices for rare earths in the second half of last year, they remain several times higher than the long-term levels that prevailed until China began severely constricting exports in 2009.
With China sharply reducing exports again last year as it closed refineries permanently or began refitting them with better environmental equipment, the underlying economics for the Malaysian refinery remain strong.
Lynas has been trying for several years to find a site for the permanent disposal of the roughly 20,000 tonnes a year of low-level radioactive waste that will be produced, and is still struggling to do so.
The International Atomic Energy Agency in Vienna recommended last June that a long-term disposal plan be approved by regulators before the refinery starts operations. Lynas now says that it has met this goal with a plan that calls for storing up to 20 years of the refinery's production waste in pits lined with plastic and clay at the refinery, plus a commitment to find a site for a permanent repository and build it.
Raja Adnan said the Malaysian board would require that Lynas meet all of the energy agency's recommendations but he declined to say whether the company's waste disposal plan complied.
After sending a team to Kuantan at the request of the Malaysian government, the agency also recommended that the project include greater public disclosure and communication.
Malaysian regulators and Lynas put three printed copies of the revised project plan on public view for two weeks last month at four locations in Malaysia, where they could be viewed on request for only one hour at a time. Volunteers ended up taking turns over 56 hours to copy the entire document by hand, then retyped the information at home to re-create the full document, Salleh said.
The chairman of Lynas, Nicholas Curtis, said the company was using proven Chinese technology, but had paid special attention to improving its safety and environmental performance.
''We simply took Chinese processes, scaled them up and cleaned them up,'' Curtis said in a speech in Hong Kong in November.
The authorities in China have also cracked down on the industry in recent months after numerous toxic leaks and some radioactive leaks contaminated thousands of hectares over the past two decades. Lynas announced last week that a heavy monsoon and some engineering work had delayed completion of the refinery again and that it would be ready in the second quarter of this year. It was originally scheduled to begin production last September.
Lynas plans to mine ore from the Australian desert and concentrate it there, removing dirt but leaving the radioactive contaminants still chemically bound to the rare earth metals. The concentrated ore will then be shipped to Kuantan and the rare earth metals will be separated from the radioactive material by using powerful acids at high temperatures.
One setback for the Lynas project is that a crucial contractor, AkzoNobel, pulled out in spring, according to engineers and internal company emails. The Dutch chemicals multinational had a contract to supply important resins.
The resins are supposed to glue together dozens of fibreglass liners for concrete-walled tanks up to the size of double-decker buses.
Hundreds of tonnes of rare earths with low levels of radioactive contamination will be mixed in the lined tanks with extremely corrosive acids at more than 90 degrees.
The corrosiveness of acids increases steeply at high temperatures, which makes acids ideal for dissolving ore but difficult to handle.
AkzoNobel has long specialised in making some of the most esoteric resins for the mining industry. It uses a secret chemical formula to help the resins hold together fibreglass even under challenging combinations of heat and corrosiveness.
The company had said that it would supply chemicals for the Lynas project only if it were certain that it would be safe.
Engineers involved in the project said, and internal emails showed, that AkzoNobel withdrew from supplying the chemicals after it was told that the fibreglass liners would be installed in concrete-walled tanks that have a problem with rising dampness in the floors and cracks in the walls. AkzoNobel had been in discussions about the problem of rising dampness, but only became aware of the cracks in spring, according to the engineers and the memos.
The engineers said they felt a professional duty to voice their safety concerns but insisted on anonymity to avoid the risk of becoming industry outcasts.
In an email, AkzoNobel said that it was no longer supplying the project, but gave only a brief explanation of its reasons. ''Due to changes in the project specification, AkzoNobel would only recommend the use of its linings on the project subject to the successful results of longer-term testing,'' the company said. ''That testing cannot be completed within the current project time scale.''
Curtis confirmed that AkzoNobel had pulled out of the project but he insisted that it was not for safety reasons.
He declined to elaborate but said that Lynas had found a new supplier for the resins, which he declined to identify.
Engineers said that Lynas was building costlier steel-walled tanks for a second phase of the factory, which would avoid the need for concrete-walled tanks with fibreglass liners.
Curtis denied this and said that all of the separation tanks and piping at the factory were safe and met international and Malaysian standards.
Rare Earth Plant Cleared To Operate in Malaysia By KEITH BRADSHER Published: February 1, 2012
HONG KONG — Malaysian regulators granted an initial operating license late Wednesday for a giant rare earth metals refinery that has been at the center of a dispute over radioactive waste management. Related
Rare Earth Metal Refinery Nears Approval (February 1, 2012) Times Topic: Rare Earths The refinery is expected to open in this year’s second quarter. It is intended to offer an alternative for Western companies that now depend on Chinese producers.
China mines and processes more than 90 percent of the world’s rare earths, but has placed various restrictions on their export in recent years, causing price spikes and spot shortages. The metals are used in items as diverse as smartphones and smart bombs, in oil refining and in wind turbines.
The Malaysian Atomic Energy Licensing Board said in a statement late Wednesday that Lynas, the Australian company that is building the refinery, must within 10 months specify a location and submit detailed plans for permanent disposal of the more than 1,000 tons a month of low-level radioactive waste that the refinery will produce. Although the issue is not expected to delay the plant’s opening, it will put pressure on the company to find a solution to the waste problem.
Lynas for years has been studying what to do with the waste and still has a research effort under way. But it has encountered growing hostility from people living near the refinery, which is on the outskirts of Kuantan in eastern peninsular Malaysia.
The licensing board said that the waste “is the responsibility of the company including, if necessary, to return the residue to the original source.” That would refer to Australia.
The refinery will process concentrated rare earth ore from a Lynas mine deep in the desert in western Australia, using heat and thousands of tons a year of powerful sulfuric acid to separate the valuable minerals from dirt and radioactive contaminants.
Lynas has questioned whether it could be required to ship waste to Australia, a task that would be extremely difficult because of international and Australian regulations on movements of waste with even very low levels of radioactive contamination.
Nicholas Curtis, the executive chairman of Lynas, has said that the company chose Malaysia for the refinery for cost reasons: Malaysian engineers earn considerably less than Australian engineers, and Malaysia’s natural gas industry produces very large quantities of sulfur that will be turned into the necessary processing acid at a separate factory adjacent to the refinery.
In an statement on Thursday morning, Lynas described the conditions of the two-year initial license without mentioning the possibility of bringing waste back to Australia. “Lynas recognizes its responsibility to the community to operate the plant in a safe and sustainable manner,” Mr. Curtis said in the statement.
Mr. Curtis said in a conference call with investors and journalists on Tuesday that the first of two phases of the refinery project was more than 90 percent complete, and that 85 percent of the staff had already been hired.
Fuziah Salleh, an opposition member of the Malaysian Parliament who represents downtown Kuantan but not the less affluent industrial area where the refinery is located, said that critics of the project had already retained lawyers to seek a judicial review of the initial license. The legal challenge will be based on whether Lynas should file a more detailed environmental impact assessment for the refinery, in response to stricter assessment requirements written into Malaysian law last summer.
The International Atomic Energy Agency suggested last summer that a plan for permanent waste disposal be approved before the refinery starts.
The Malaysian decision comes two days after the World Trade Organization’s highest tribunal ordered China to dismantle its taxes and quotas on exports of bauxite, zinc and seven other industrial minerals.
That decision did not include rare earths. But China has used the same legal arguments to defend its export taxes and quotas for rare earths — arguments that the trade organization has now rejected. The United States and the European Union have been preparing to file a possible case with the organization, challenging China’s rare earth policies.
The Global Times, a newspaper directly controlled by the Chinese Communist Party, published a blistering editorial on Wednesday condemning the decision.
http://www.freemalaysiatoday.com/2012/02/03/aelb-lynas-licence-not-issued-yet/ AELB: Lynas licence not issued yet Stephanie Sta Maria | February 3, 2012 It also says that the TOL will answer the public's questions on safety and whether the LAMP meets national and international regulations.
DENGKIL: The Atomic Energy Licensing Board (AELB) today clarified that Lynas Corporation has yet to be issued a Temporary Operating Licence (TOL).
The TOL, which was approved on Wednesday, would only be issued once Lynas made the required payments and the AELB appointed an independent, third-party assessor. These payments comprise the licencing and processing fees, the first instalment of the US$50 million to the Malaysian government and the cost of AELB’s third-party assessor. At a media briefing at its headquarters in Dengkil this morning, AELB director-general Raja Abdul Aziz Adnan confirmed that until the first instalment of US$10 million is made the licence would not be issued.
The US$50 million was one of the five conditions attached to the approval of the two-year TOL and would be made in five instalments to the government.
“The money will be deposited with the Malaysian government but it is not the property of the government,” Aziz explained.
“But the board will be able to use it in case of unwarranted incidents like if Lynas ceases operations after two years. Then we will have the financial assurance and guarantee to take care of any residue produced.” Asked if there was a deadline for the first instalment, Aziz said it was dependent on how soon Lynas wanted to begin operations in Gebeng. “As for the appoiment of the third-party assessor we have begun the process and hope to complete it within this,” he assured.
“What is important is that this third party is recognised by other regulatory authorities and has experience in chemical plants. So we will be working to our schedule and not that of Lynas.”
Aziz’s ensuing explanation of the difference between a TOL and an operating licence, however, might raise more concerns over the safety of the Lynas Advanced Materials Plant (LAMP).
He said Lynas’ documents had already underlined the safety of the LAMP but also acknowledged that this information could be based on other plants, pilot studies or laboratory experiments.
“In a new plant it is normal for regulatory authorities to have a TOL to verify whether the claims in the safety documents are actually what they claim to be,” Aziz said. “We hope that by the end of the two years we will be able to further answer public questions on safety and whether the LAMP is within the limits of national and international regulations, and best practices.”
This statement would not go down well with anti-Lynas groups who were accusing Lynas and the government of making lab rats out of Kuantan residents.
TOL – not an automatic route Aziz also emphasised the importance of the TOL stage and that it was not an automatic route towards Lynas receiving an operating licence.
For that Lynas would require another submission of documents which will be updated with the date collected during the TOL duration. These documents will then be subject to another round of reviews and evaluations.
“So please do not confuse the TOL with the next stage which is not on the table right now and not under consideration,” Aziz said.
He added that the TOL was also not an open licence for Lynas to provide lanthanides and reminded the media that a separate permit is required for each importation of ore concentrate.
Another of the five conditions was for Lynas to provide a detailed plan and location of its proposed Permanent Disposal Facility (PDF) to the AELB within 10 months of the licence issuance.
While Lynas has yet to identify the location of the PDF, Aziz stated that Gebeng would not be accepted as one of them and that the facility would require a separate permit. He also assured that the government was well-equipped to deal with any untoward incidences involving waste material and pointed out that Lynas was not the country’s first mineral processing facility.
“Malaysia was once the world’s top producer of tin and tin contains uranium and thorium as well,” Aziz said. “So we have the experience and expertise to handle any scenario.” Under the TOL, Lynas would have to assume full responsibility for the residue management including returning it to the original source if necessary. But Australia had already stated that it would not accept any of the residue back into the country.
Aziz declined to comment on this and instead said Lynas would have to show evidence of the “principles” that it put forth in its Radioactive Waste Management Plan. “We need to see the profiling and location of the PDF,” he repeated. “And that the principles are engineered to suit the location.”
Meanwhile, when grilled on the AELB’s apparent disregard for the 1,123 public comments on Lynas’ document, he hesitated and then replied that the public review shouldn’t be seen as a public survey.
“Some comments posed good legal and technical points which we have taken into consideration,” Aziz said. “The public review is in fact uprecedented as AELB has no such provision.”
Lynas last week announced that it had raised US$225 million (RM700 million) in bonds to complete Phase One of the plant and would be delaying operations to the second quarter of the year.
LYC Price at posting:
$1.43 Sentiment: Hold Disclosure: Held
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