Malaysian Rare Earth Plant Shoots for October Operation

The Lynas Corporation rare earths processing plant in Malaysia expects to start processing ore in October, according to an email from the Sydney headquarters of the Australia-based company.

“We look forward to the safe commencement of operations at the Lynas Advanced Materials Plant,” the spokesman said.

Barring additional legal action to stop it, and depending on how quickly the plant, in an industrial estate in Gebing near the Pahang state city of Kuantan can gear up to full production, the decision last week to grant the license is expected to make Malaysia a major force in the production of rare earths, minerals used in a long list of high-tech products. Almost all of the ore being produced globally today is exported from China, which has sharply curtailed its production since 2010 because of devastating environmental problems. Chinese 2012 industrial production growth is averaging only 10.5 percent, well below the average growth rate of 14.7 percent annually over the past 10 years. The country exported 3,046 tonnes of rare earth ores, metals and compounds in the first four months of 2012, down 43 percent year-on-year, according to the Lynas quarterly report. However, slackening global industrial activity has kept prices down.

The United States stopped rare earths production two decades ago, although the skyrocketing prices of the minerals has led to plans to reopen mines on the California-Nevada border.

More than 1,300 employees have been working at the Gebing plant, according to Lynas’s second-quarter financial report, without being able to process any ore. Environmentalists, in league with the Pakatan Rakyat political opposition, have vowed to blockade the ships that bring the ore some 4,000 km from Australia’s west coast for processing at the sprawling plant.

The plant has been bitterly opposed by environmentalists and has become a political cause célèbre for the opposition coalition, with rallies all over the country. Approval had been pending for more than a year while it was shuffled from government department to department. Lynas received a temporary operating license on Feb. 1, only to have it appealed, then appealed a second time.

In the meantime, a mountain of, more than 13,000 dry tonnes of concentrate containing more than 4,800 tonnes of rare earth ores has been building for months at the company’s Mount Weld mining facility in Western Australia, the company said. Construction of Phase 1 of the plant was completed during the second quarter of 2012, with overall progress 64 percent complete at the end of June, according to the company’s second-quarter report, with construction of phase 2 to be completed by early 2012.

The protesters say they fear that Malaysia’s inability to police its environmental laws could end up with the waste byproducts from the plant leaching into the water table or drifting into the atmosphere.

Lynas previously told Asia Sentinel it has poured nearly A$800 million and seven years into getting approvals for the plant. The issue has become so sensitive because a rare earth plant developed in the 1980s ended up contaminating air and groundwater at Bukit Merah near Ipoh. Several people were treated for various cancers because of the plant and later died. Mitsubishi Chemical Corp, which developed the plant, has spent an estimated US$100 million in the effort to clean up the environmental disaster.

However, Lynas spokesmen say, there is no danger because the ore being processed doesn’t have anywhere near the radioactivity that the Bukit Merah plant produced.

According to the British Geological Survey, the 17 elements grouped together as “rare earths” have become essential for advanced manufacturing of a wide range of technological items. They include neodymium, used to make magnets for computer drives and loudspeakers, components in wind turbines and hybrid cars; lanthanum, used for carbon lighting applications such as studio lighting as well as camera and telescopic lenses.

Cerium is used in the manufacture of catalytic converters for car exhausts. Praseodymium is used to strengthen metals in aircraft engines. Gadolinium is Used in X-ray and MRI scanning systems, and also in television screens. Research is also being done into its possible use in developing more efficient refrigeration systems. Yttrium, terbium and europium are important in making televisions and computer screens and other devices that have visual displays. Europium is also used in making control rods in nuclear reactors.

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