Pressure builds on KL to soften July 1 deadline for rare earth miner Lynas to go radiation-free

KUALA LUMPUR - The Pakatan Harapan-led (PH) government has come under heavy pressure to ease a

July 1 deadline

for Lynas, the world’s most important rare earth producer outside of China, to ensure practically radiation-free operations at its Malaysian plant.

Authorities issued a three-year licence renewal to Australian miner Lynas in February, but

refused to remove conditions

in the licence that require it to move “cracking and leaching” of lanthanide concentrate offshore and to only refine intermediate materials at its facility in Gebeng, near Kuantan in Pahang.

These refining processes have sparked fears of environmental and health hazards from the waste product, especially the release of radiation which Lynas insists has no impact on the normally occurring levels around Gebeng.

Lynas – which produces a-tenth of the world’s supply of rare earth crucial to manufacturing high technology products like smartphones and flatscreen TVs – has launched a strenuous defence of its operations ahead of its appeal against the licence conditions on April 28.

Opposition lawmakers from the Perikatan Nasional (PN) coalition have also sought to make the case for the facility in Pahang, saying it can be a source of technology transfer so that Malaysia can be a player in the crucial industry for cutting-edge applications.

“Rare earth is an issue that goes beyond science but also geopolitics and our economy,” Parti Pribumi Bersatu Malaysia youth chief Wan Ahmad Fayhsal Wan Kamal said in Parliament last month.

“If we persist with these conditions, then we might as well shut the plant.”

Lynas has issued a raft of rebuttals since February, disputing claims that its operations are environmentally unsafe and a health hazard.

It also organised a gathering of its employees on Feb 23 in an appeal to Prime Minister Anwar Ibrahim to intervene in the licence decision which “has put the livelihoods of thousands of people at risk”. 

The Straits Times has learnt that local PN politicians in Pahang as well as industry and diplomatic officials have lobbied Science, Technology and Innovation Minister Chang Lih Kang to at least defer the July 1 deadline to later this year, so that Lynas can complete building an alternate cracking and leaching refinery in Australia.

A potential closure of the S$1 billion facility would not just be a huge blow to Lynas – which has yet to fire up other production plants – but will also impact the

geopolitically sensitive

supply of rare earths crucial to make products such as mobile phones, rechargeable batteries and military assets. China controls four-fifths of the world’s rare earth production.

“The request is for six months as the Australian plant won’t be completed in time,” a source told ST on the confidential negotiations ahead of the April 28 hearing to be chaired by the minister.

Mr Chang, vice-president of Datuk Seri Anwar’s Parti Keadilan Rakyat (PKR), had declined to comment on the Lynas issue in an interview with ST last month, stating that he did not want to prejudice the appeal which he has sole discretion to decide on.

“Now it’s at the appeal stage, it’s better not for me to say anything. The decision will be final. Somewhere in early or mid-May,” he said.

The issue is politically-sensitive as PH had, in the run-up to the 2018 general election which it won, promised to reverse the then Barisan Nasional (BN) regime’s decision to greenlight Lynas’ operations.

The Umno-led BN is now a key ally in PH chief Anwar’s so-called “unity government” after last year’s election resulted in Malaysia’s first ever hung Parliament.

Lynas had faced stiff public resistance when it first made plans to set up in Malaysia over a decade ago, sparking fears that there would be a repeat of toxic radiation that previous rare earth projects had caused in Malaysia.

However, after PH took power in 2018, it allowed Lynas to continue operations on progressively more lenient terms.

This raised public ire and contributed to growing tensions within the PH coalition. The PH government eventually

collapsed in March 2020,

after dozens of MPs from Bersatu and PKR defected.

Just days before PH was ousted, it was announced that the government had given Lynas a three-year permit to operate on the condition that cracking and leaching would be moved out of Malaysia,

and a waste disposal site developed within a year.

There is no record of Lynas mounting an appeal against these conditions imposed in 2020.

ST understands that the permanent disposal facility – being built by a company controlled by Pahang Regent Hassanal Abdullah, the son of Malaysia’s current King Abdullah Ahmad Shah – is more than 30 per cent complete.