Mining fear and suspicion

Let’s refine the disclosure standards

A LOT of money doesn’t make one project better. Let’s get that straight. First. Foremost.
The thick flow of mega projects costing tens of billions of ringgit has hogged space in local business sheets in recent months. One can’t be blamed for being overwhelmed, let alone trying to digest the social, economic and the environmental implications of these projects.
So you’d think that it would have been easy for a RM700mil project to get buried under the thicket of limelight, left alone to do its thing quietly, fuss-free until absolutely necessary for it to come out. Not this one (although, quite surprisingly, it almost did).
It was the New York Times which lifted the dusty cloak off the “colossal project” being built in a small, industrial town in Kuantan, Pahang called Gebeng. Potentially, Malaysia will be host to the world’s largest and first refinery for rare-earth metals outside China, which is being built by a subsidiary of Lynas Corp, a major public-listed Australian mining company. The plant’s targeted completion date is the third quarter of this year.
Why would the New York Times, followed by a herd of Australian, Japanese and Canadian leading newspapers which played up this angle over the week, give a rip about this project, which in relative terms (US$250mil) was not mega, you ask? (After all, the last time in recent memory that a New York-based newspaper dedicated editorial space to Malaysia, it was on the social scene of a “chubby” Malaysian’s glitzy and lavish lifestyle in Manhattan).
Here’s why: China’s controls 97% of the world’s rare-earths industry. Its sheer dominance of these precious commodities, which many countries rely on for their business and national security needs, has been a rattling point for major consumers such as the United States, the European Union and Japan. (Rare earths are found in cell phones, radar and high-end applications, including compact fluorescent light bulbs, flat-panel displays, iPads, automotive catalytic converters and rechargeable batteries for electric and hybrid vehicles, among many other things).
Not helping is Beijing’s perceived arrogance over its near monopoly. It recently moved to limit its rare-earth exports which further cemented the nagging suspicion that it is hoarding the crucial elements.
And now, the crux: if Malaysia’s rare-earth project takes off, the refinery could meet nearly a third of the world’s (ex-China) demand for rare-earth materials, which would dilute the leverage China currently basks in. Indeed, this could very well be the balm to soothe the frayed nerves of the Americans, Europeans and Japanese.
Sadly, closer to home, it’s au contraire; this very project is drawing heated criticisms, not least due to its potential hazards. Rare earths may not be radioactive themselves but almost every rare-earth ore deposit contains, in varying degrees, a slightly radioactive element.
The project itself is not new. In fact, it has been in the making for eight years before it commenced in 2008. In early 2009, it hit a snag for reasons not quite clear, which led to an abrupt halt in works. By the time work resumed in late 2009, it was forgotten – up to now.
But questions abound. If the United States is currently aggressively pushing for research and development of these elements in order to eventually spur private investments in this sector, perhaps Malaysia, a developing economy, should walk before it runs as well?
Has a detailed feasibility study been carried out from the socio-environment perspective and was one carried out before the construction of the plant had begun? If so, can we have a look-see, please?
Malaysia’s track record in this area is not blemish-free. In 1985, a rare-earth refinery in Bukit Merah, Perak was set up and eventually shut down in 1992 due to a radioactive botch up; the mess, till today, is still being cleaned up by Japan’s Mitsubishi Chemicals in an exercise that is said to cost US$100mil.
The Malaysian public, and especially the people of Gebeng, deserve to be convinced and assuaged that this new refinery is safe. What they don’t deserve is to watch the processing plant being built to completion with little or no information forthcoming.
If the United States, Canada and Australia have rare earths but had stopped mining them in the 1990s, then why are we getting into this?
Those with political wiles will say that this project draws in the much-needed foreign direct investment into the country while creating job opportunities. But that still does not steal away the imperative for the Malaysian public to have access to sufficient information throughout the process of the project.
This task does not have to be borne by the Government alone. Surely Lynas, with a market value of A$3.5bil can pitch in, especially given its experience dealing with the even more vociferous ultra-green lobbyists in Australia?
● Business editor Anita Gabriel thinks public wrangling over controversial projects can be drastically reduced if those involved pay careful attention to reaching out to the masses. Is that so hard to do?