Australian mining company Lynas Rare Earths said on Friday (20/10) that it would temporarily close most of its operations in Malaysia for repairs to its downstream facilities as it faces a legal dispute with the Malaysian government over its operating permits.
Lynas said in a report to investors that a Malaysian court in November would hear its application to remain operational while the legal process plays out. However, the report did not mention the exact date.
Malaysia’s Lynas refinery, which is the first refinery outside China to produce minerals critical to high-tech manufacturing, has been operating in Pahang state since 2012. But the refinery has been caught up in a dispute over radiation concerns from waste accumulating at its plant.
Earlier this year, the Malaysian government agreed to extend Lynas’ license for three years until March 2026. However, the government said Lynas must move the cracking and leaching of rare earth metals, which produce radioactive waste, out of Malaysia. Lynas is also not allowed to import raw materials containing radioactive elements into the country.
The government says Lynas has generated more than one million metric tons of radioactive waste since 2012.
Lynas insists its operations are safe and is trying to eliminate conditions which it says are a “significant variation” from the conditions when it made the initial decision to invest in Malaysia. It has taken its dispute with the government to Malaysian courts and said it is ready to face any outcome.
Most refinery operations in Malaysia will be closed for the next two months while Lynas prepares to repair its downstream operating facilities, the company said.
FILE: Praseodymium and neodymium rare earth oxides in the final stages of production at the Lynas Advanced Materials Factory in Gebeng, Malaysia July 3, 2014. (REUTERS/Sonali Paul)
Lynas said these improvements were essential if its permits were to be renewed to be able to continue importing and processing raw materials from January 1. Lynas said it also plans to carry out further maintenance work on the cracking and washing facilities, if operations are allowed to continue as normal.
If the permit is not extended, Lynas said the additional downstream capacity could be used for a new facility in Kalgoorlie, Australia. Demand for rare earth metals remains high, driven in large part by the development of electric vehicles globally.
“Lynas continues to manage operations to optimize results in a variety of scenarios. “Key variables include operating permit conditions in Malaysia and the start-up and commissioning process in Kalgoorlie,” he said.
Rare earths are 17 minerals used to make products such as electric or hybrid vehicles, weapons, flat-screen TVs, cell phones, mercury vapor lamps and camera lenses. China has about a third of the world’s rare earth metal reserves, but has a near monopoly on supply. Lynas said its refinery could meet nearly a third of world demand for rare earths, excluding China.
Environmental groups have long campaigned against Lynas’ operations and demanded the company export its radioactive waste. They argue that the radioactive elements, including thorium and uranium, in the waste are not in their natural form but become more dangerous after going through mechanical and chemical processes.
Malaysia’s only other rare earth oil refinery – operated by Japan’s Mitsubishi Group in Malaysia’s northern state of Perak – was closed in 1992 following protests and claims that it caused birth defects and leukemia among residents. It is one of the largest radioactive waste cleanup sites in Asia. (ab/uh)