KUALA LUMPUR - Malaysia has extended the controversial but highly strategic Lynas rare earth refinery's licence for six months, during which it must finalise plans to build a permanent disposal facility (PDF) for over half a million tonnes of radioactive waste and a pre-processing plant overseas to decontaminate ore.
The announcement by the country's Atomic Energy Licensing Board (AELB) ahead of the Sept 2 expiry of the Australian miner's operating permit confirms The Straits Times' report in July that the government would abandon an earlier demand for the waste to be repatriated as a requirement for licence renewal.
The radiation regulator said these conditions were set after Australia's federal government and the Western Australian state government told Malaysia they would not take back Lynas' radioactive water leach purification (WLP) residue.
"The construction of the PDF must be expedited to minimise the risk of the accumulated WLP radioactive residue that has exceeded 580,000 tonnes... from exposure to natural disasters such as heavy flooding," the AELB said, adding that the decision by Malaysia's Cabinet was based on recommendations by a government review panel in November 2018.
The AELB also said it is up to Lynas to identify the PDF site and gain the necessary permissions, failing which it must find another country to accept the WLP residue.
Plans for a "cracking and leaching" facility overseas to take over these processes from the Malaysian refinery must also be tabled, and it must be operational within four years.
Lynas mines rare earth ore from a deposit in Mount Weld, Australia, and processes them at its plant in Pahang.
It had committed A$500 million (S$471 million) in May to expand operations by 2025, which would include a pre-processing facility in Australia to decontaminate the ore before it reaches Malaysian shores.
Building a PDF, as recommended by the review panel in 2018, was acceptable to Lynas, but subsequently Energy, Science, Technology, Environment and Climate Change Minister Yeo Bee Yin decided to override it.
Instead she ordered the full export of waste from the US$800 million (S$1.11 billion) refinery as a prerequisite for licence renewal.
The AELB has also ordered a halt to the firm's multi-million-dollar research into the use of WLP residue as fertiliser, and told it to redirect the contractual 0.5 per cent of gross revenue for research and development towards an additional security deposit until the "cracking and leaching" facility is operational.
China controls 70 per cent of the world's rare earth production and meets 80 per cent of the United States' demand.
But the escalating trade war between the two superpowers has sent investors scurrying for alternative sources of the material, which is crucial in high-technology electronics and defence applications.
Lynas, which began operations in 2012, produces about 12 per cent of the global rare earth supply.
The PDF solution is not just a compromise between the Malaysian government and Lynas but also among Pakatan Harapan (PH) leaders, some of whom had led protests against the refinery over alleged radioactivity and pollution while still in opposition.
Anti-Lynas campaigners are set to protest against the decision this Sunday (Aug 18) by burning a copy of the PH election manifesto, which had vowed to govern based on sustainable development.