Global Courant 2023-05-07 12:05:00
KUALA LUMPUR – Malaysia has extended a deadline for Australian miner Lynas to January 2024 to ensure its Rare Earth plant in Pahang, the world’s largest, is effectively radiation-free.
The Straits Times has learned that the six-month extension, following an appeal hearing on April 28, was passed to Lynas late Friday ahead of an expected announcement this week.
The decision, legally at the discretion of the Minister of Science, Technology and Innovation, Chang Lih Kang, is closely watched due to the geopolitical importance of rare earths.
China controls four-fifths of global production of the mineral that is crucial for high-tech applications such as smartphones, electric vehicles and military assets.
Authorities granted a three-year license extension to Lynas in February, but declined to lift the terms effective July 1. The main requirement is the need to move “cracking and leaching” of lanthanide concentrate to another location outside Malaysia and only refine semi-finished products. at its factory in Gebeng, near Kuantan in Pahang.
The refining processes have led to fears of environmental and health hazards, particularly the release of radiation that Lynas insists does not affect levels normally encountered around Gebeng.
Both the opposition Perikatan Nasional and industry and diplomatic officials have lobbied Mr Chang to review terms to ensure that Lynas does not have to close its Malaysian operations, which account for half of the world’s rare earth reserves outside of China .
PN legislators said the Pahang facility could be a source of technology transfer to help Malaysia become a player in the crucial advanced applications industry.
In its quarterly report last month, Lynas said if licensing terms remain unchanged, it would have to temporarily close its Malaysian factory in mid-July. There will be little or no production for the next three months before ramping up, depending on how an alternative cracking and leaching refinery in Australia progresses.
“The six-month delay now allows Lynas to transition seamlessly. It’s a win-win compromise,” a source told ST.
ST reported in April that in addition to Lynas’ request to completely scrap the licensing conditions, Western diplomats had asked the Malaysian government for another six months to get the Australian refinery operational again.
Lynas is one of the high-profile issues that have forced the Pakatan Harapan (PH)-led government to downplay its earlier statements.
This includes last Wednesday’s decision to allow Swedish telecommunications company Ericsson to proceed with the nationwide rollout of Malaysia’s 5G network, despite previous claims of abuse in the way previous governments handed out contracts for the new mobile technology.
This comes amid widespread speculation that Chinese rival Huawei could be brought in as a competitor.
Prime Minister Anwar Ibrahim’s Pakatan Harapan (PH) coalition previously campaigned in the 2013 and 2018 general elections to shut down the Lynas factory, which was established more than a decade ago under the Barisan Nasional (BN) government.
BN, led by the former governing party Umno, is now a key ally in its national unity government after the 2022 general election resulted in Malaysia’s first-ever hung parliament.
