Malaysia to be next rare earth processor?

June 30, 2011 at 2:05 PM
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KUALA LUMPUR, Malaysia, June 30 (UPI) -- Australian mining giant Lynas Corp. Ltd. said it will comply with recommendations of the International Atomic Energy Agency for the approval of the company's Malaysian rare earth processing plant.

The IAEA report, released Thursday, recommends 11 improvements to be implemented before awarding Lynas further licenses for the $220 million facility in Kuantan, including a decommissioning plan and dedicated funding for cleanup work at the site.

"We will implement all aspects of the recommendations together with the regulatory authorities to further enhance the plant's safety," Lynas Executive Chairman Nicholas Curtis told reporters Thursday, Malaysian national news agency Bernama reports.

Curtis said the plant would be operational at full capacity by the second half of 2012 and ready to deliver some products by the first half of that year.

Lynas has said the refinery, the first processing plant to be built outside of China in nearly 30 years, would meet nearly one-third of the world's demand for rare earths, 17 minerals used to manufacture such products as wind turbines, batteries for hybrid and electric cars, flat-screen monitors, missile guidance systems and mobile phones.

While China supplies more than 90 percent of the global supply of rare earths, its reserves represent one-third of the global total. Beijing has further tightened its grip on the minerals with price hikes of up to 300 percent this month, following extensive export quotas over the last two years.

Lynas plans to ship the ore from the company's Mount Weld mine in Western Australia to Malaysia, where it would be mixed with powerful acids, producing a slightly radioactive watery mixture to be pumped through the facility's 70 containment tanks.

A rare earth refinery in Malaysia operated by Japan's Mitsubishi Chemical, closed in 1992, is now one of Asia's largest radioactive waste cleanup sites, The New York Times reports.

The IAEA report also recommended Lynas do more for the Kuantan community, who have fiercely protested the plant.

"We intend to increase our commitment to community engagements, including a long-term conversation with the residents in Kuantan that will continue for the life of our plant," Curtis said Thursday.

But engineers involved in the project told The New York Times the IAEA inspection earlier this month was hasty, in part because of security concerns stemming from protesters gathering outside the refinery gates.

In the Times report, published Thursday, the engineers raised safety concerns, including structural cracks, air pockets and leaks in many of the concrete shells for the containment tanks.

Responding to the Times report, Curtis told reporters: "We can confirm there are no engineering issues which we believe will be unsafe. We put the safety of the community and employees ahead of anything else and we will in no way compromise the engineering standards."

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