Malaysian Rare Earth Refinery Draws Environmental Concerns

In Malaysia a rare earth refinery under construction could end China's near-monopoly over the elements that are essential for manufacturing many high tech products. But some environmental organizations are opposing the plant's construction, saying it will produce massive amounts of radioactive waste and present a serious health risk to the public.

The Lynas Advanced Materials Plant in Malaysia's central Pahang state is expected to add stability to the world supply of key components used in electronics, green technology, and advanced weapons systems. It is the first rare earth processing plant being built outside China in the last thirty years. China currently produces over 90 percent of the globally supply of rare earth materials.

Nick Curtis, executive chairman of the Lynas Corporation, says China’s decision last year to temporarily block shipments to Japan over a political dispute reinforced the importance of creating other supply alternatives.

“The manufacturers of new high tech equipment outside of China are very concerned that there be a stable long term source of rare earths," Lynas said. "The Malaysian refinery is going to give them the opportunity to have access to long term stable non-China source rare earths.”

The Malaysia plant is scheduled to open this year. When fully operational, it is expected to be able to meet up to 30 percent of the world's demand for rare earths outside of China.

For Malaysia the plant will create over 350 engineering jobs and could encourage high tech companies to start up new operations near the supply of these essential materials.

Curtis says the economic conditions in Malaysia, the available pool of skilled labor, the infrastructure, the proximity to markets, and the relatively low wages make it economically feasible for the plant to process rare earths materials that are mined in Australia.

Some environmental organizations oppose the processing plant because of concerns over public health risks. Processing rare earth materials produces radioactive waste. In 1992 a Mitsubishi Chemicals rare earth refinery was shut down in Malaysia following claims that it caused birth defects and leukemia among nearby residents.

S.M. Mohamed Idris, president of Sahabat Alam Malaysia also know as Friends of the Earth Malaysia in English, says the Lynas plant is another case of a multinational corporation taking advantage of the lax regulations and enforcement in the developing world.

“We are very anti-nuclear and its effect on the people. And also we are wondering why the Australians cannot process in there own country, [and] they send it here,” Idris said.

The International Atomic Energy Agency is sending a team to assess the plant's compliance with the international safety standards. The Malaysian Ministry of Trade is declining all interview requests until it reviews the IAEA's report.

Curtis says the Lynas Corporation welcomes the IAEA review and refutes claims that the company is trying to evade environmental regulations.

“The environmental regulations in Malaysia are some of the tightest in the world. We actually went to Malaysia because we could see that the experiences, the unfortunate experiences that they had with rare earths back in the 1980's and the early 1990's actually set a body of regulation about any possible risk associated with environmental impact in this industry,” explained Curtis.

Abiding by strict environmental regulations, he says, helps ensure the plant will be operational and profitable in the long term. Some of the environmental protection measures being utilized in the plant include gas scrubbing units, a waste water treatment plant, and a storage facility for solid residue containing low level radiation.