Opposition leader Anwar Ibrahim says he will expose fraud in the election process. Photo: Reuters

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Apart from re-elected Prime Minister Najib Razak, one of the big winners in Malaysia’s recently concluded national elections was Australian rare earths miner Lynas Corp and its’ processing plant in Kuantan.

On Tuesday at 10:35am in Sydney, shares of Lynas jumped as much as 13 per cent to A$0.54, the most since January 7, in what confirms the nervous jitters of investors prior to the announcement of the victory of National Front coalition, Prime Minister Razak’s ruling party. On Monday, its shares closed 16 per cent higher at A$0.58.

Investors nervously monitored not only the development of Malaysia’s elections but also how it can possibly affect Lynas’ US$800 million rare earths plant. Prime Minister Razak’s opponent, Anwar Ibrahim, had vowed to cancel the project and have the plant shut down.

”Now I think the market can focus on the underlying business of the company, which is the commissioning and ramp-up of phase one and two of the [Lynas Advanced Materials Plant] and the state of rare-earths markets,” Mark Busuttil, JPMorgan resources analyst, told Business Day.

“The market should rally strongly as Barisan National won more than expected,” Chris Eng, head of research at Etiqa Insurance & Takaful Bhd, told Reuters.

The rare earths plant, which opened in February, is the biggest outside China, the world’s stronghold of rare earths. China controls more than 95 per cent of the world’s supply of rare earth metals, essential components to manufacture a lot of the high tech gadgets and weaponry today.

Lynas said on April it was on schedule to meet its 11,000 tonnes a year production target by the end of the second quarter of this year.

But it took two years for Lynas to finally get to operate its plant, which happened only on November 2012, due to the lengthy environmental and safety disputes hurled by residents and the Save Malaysia Stop Lynas and Stop Lynas Coalition protest groups.

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Read more: Lynas rises 18pc after Malaysia re-elected http://www.btimes.com.my/Current_News/BTIMES/articles/20130506124913/Article/index_html#ixzz2SkXYdstG

PETALING JAYA – A non-government organisation ( NGO) claims that the Lynas plant is illegal despite the recent appointment of an Operations Monitoring Committee (OMC), seen as another move to disguise controversy surrounding the plant.

Himpunan Hijau chairman Wong Tack, who is contesting in the general election in Bentong on a DAP ticket, stressed that neither the public nor environmental NGOs will compromise their stand just because Lynas has fulfilled another recommendation made by the Parliamentary Select Committee.

“The setting up of the plant did not comply with the law in the first place. Furthermore, the members of this committee should have been appointed two years before the plant even started operations, not two weeks before elections,” he told theSun.

“All this shows that Lynas will never be able to prove it is a responsible organisation because of a history of lying and cheating.

“The people have also lost confidence in the government in guarding the public’s interests,” he added.

Wong said the committee’s full membership list, scope of monitoring and methodology have not been disclosed and this only instils doubt.

“Only the head of the committee and a spokesperson have been identified, but what of the others? What are each member’s specifications? Will the committee make all its reports public?” he questioned.

“If Lynas came in through the back door, they should get out through the back door and not try to disguise themselves behind so-called responsible moves,” he said.

Malaysian Institute of Chemistry president Datuk Dr Soon Ting Kueh was appointed chairman of the OMC on Saturday with Universiti Malaysia Pahang deputy vice-chancellor Prof Dr Badhrulhisham Abdul Aziz as Lynas spokesperson.

-thesundaily

In the Internet era, even a 64-year-old retired math teacher can become a threat to a large company, Lynas Corp. has found as activists challenge its plans to refine rare earths in Malaysia.

 

 

 

 

 

 

 

 

 

 

 

Protesters from the Save Malaysia Stop Lynas group demonstrated outside a hotel in Sydney, Australia, in November. Bloomberg News

KUANTAN, Malaysia—In the Internet era, even a 64-year-old retired math teacher can become a threat to a large company.

That, at least, is the experience of Lynas Corp. For over a year, the Australian rare-earths mining company has come under fire from Tan Bun Teet and his band of tech-savvy campaigners on Malaysia’s South China Sea coast.

The group, called Save Malaysia Stop Lynas, has disrupted Lynas’s plans to open a refinery with a nimble, Internet-based campaign, drawing nationwide support through regularly updated blogs, Twitter feeds and a Facebook page. In a recent interview, Chief Executive Officer Nick Curtis said Lynas underestimated the extent to which the protesters had enlisted the organizing power of the Web, forcing the company to delay the opening of the plant until this past November, a full year behind schedule, and to raise money it didn’t initially plan for.

Sydney-based Lynas, which is listed on the Australian Securities Exchange with a market value of 1.2 billion Australian dollars ($1.24 billion) appeared to be onto a winner when it broke ground for a new plant in Kuantan nearly five years ago. Global demand for materials such as lanthanum and neodymium was surging as the world’s appetite for hybrid cars, wind turbines and ever-faster phones with better screens increased.

The prospect of weakening China’s chokehold on 95% of the world trade in these critical elements helped convince Malaysia’s government that the project would be a success. It offered the firm a 12-year tax holiday to set up shop in Pahang, the home state of Prime Minister Najib Razak.

Instead, construction of the $800 million Lynas refinery kicked off a debate with local residents about how to handle the low-grade radioactive waste that comes from processing rare-earth elements. The company and the Malaysian government say the plant is safe.

The clash is also now spilling over into national politics, as opposition firebrand Anwar Ibrahim incorporates the cause in his bid to topple the coalition that has governed this predominantly Muslim nation since independence from Britain in 1957. Elections are expected to be called this spring.

“If we can’t challenge the government in the courts, then perhaps the election will change the game,” says Mr. Tan, a wiry, methodical 64-year-old.

Rare earths are a group of 17 elements valued for their magnetic and conductive properties. While harmless by themselves, they are frequently found mixed with potentially dangerous radioactive ores such as thorium. Separating and refining them can be complex and messy.

That has raised alarm among Malaysians who fear the government hasn’t done enough to ensure the safety of the Lynas plant. “We can’t trust them to do what’s right,” said Yu Siew Hong, a young mother who lives near the new facility.

Last month, Lynas secured a victory when the High Court in Kuantan dismissed protesters’ allegations that Malaysian authorities improperly awarded the firm an operating license. The company’s stock is also regaining interest among investors: J.P. Morgan Chase & Co. upgraded its recommendation on the shares to “buy” from “hold” in recent weeks.

The company’s stock has continued to drift south, underscoring the difficulties still facing Lynas’s plans to become a breakthrough player in the global rare-earths market. Lynas’s shares fell 2.4%, to 61 Australian cents, on Monday.

Among other things, the company still faces another judicial review sought by Mr. Tan’s group.

The upshot: Lynas’s outlook “is still very uncertain,” said Deutsche Bank analyst Chris Terry.

Mr. Tan, who serves as Save Malaysia Stop Lynas’s spokesman, isn’t your common variety of eco-warrior. He and the other protesters hadn’t taken much of an interest in environmental issues until Lynas began building its plant at the Gebeng industrial estate near Kuantan. Unlike groups such as Greenpeace or Friends of the Earth, the group didn’t have experience in organizing protest campaigns.

Their emergence is part of a trend of smaller and smaller groups targeting corporations and markets, rather than governments, to achieve their goals, sometimes with spectacular effects.

In an extreme recent example, Australian activist Jonathan Moylan organized a hoax in early January in which he and his cohorts temporarily wiped $315 million off the market value of Whitehaven Coal. Mr. Moylan issued a statement, purportedly from the company’s bank, saying it had withdrawn funding over concerns about environmental damage. The shares later recovered and Australian market regulators are now investigating the matter. Mr. Moylan couldn’t be reached for comment, but local media have quoted him as saying he issued the statement.

Mr. Tan and his friends, for their part, filed a series of actions specifically aimed at damaging Lynas’s ability to secure additional funding and force it to give up.

“Refining rare earths is a dirty business and we want people to know what it involves. We might not win in the courts, but whatever action we take, it bleeds Lynas a little bit more and makes it more difficult for them to raise money,” says Mr. Tan. The group’s flurry of writs delayed Lynas obtaining a temporary operating license until this past November, a full year behind schedule, driving a decline in the company’s share price from A$1.59 in February 2012 to the 61 Australian cents now, and forcing Lynas to raise more money to keep going.

“We’ve raised 175 million [Australian] dollars more than we wanted. It’s cost our shareholders,” Mr. Curtis, Lynas’s chief executive, said. “It’s not acceptable, but it is what it is.”

The government is taking notice of the protesters’ pull, too. In December, four cabinet ministers warned in a joint statement that Lynas must export all waste material from its plant or see its operations suspended.

Lynas says it intends to process the radioactive waste into other materials, such as road surfacing, diluting it. The company plans to export the material to comply with Malaysia’s requirements.

Analysts say the obstacles Lynas has faced in Malaysia prevented it from enjoying a boom in rare-earths prices. The plant is finally operating, but prices for some rare-earth elements are now 80% off their peaks.

Lynas’s Mr. Curtis concedes the opportunities lost but views the market as now being on a more sustainable growth path.

“Hopefully, when the election is out of the way, we’ll be able to get down to business,” he said.

Write to James Hookway at james.hookway@wsj.com

German environmental research group, the Oeko-Institute has published a report criticising Australian Rare Earth mining company, Lynas Corporation’s refining facility in Malaysia which is critical of its environmental impact and its poor storage of radioactive wastes.

According to the researchers, the storage of radioactive and toxic wastes on site does not prevent leachate from leaving the facility and entering ground and groundwater.

The report, conducted on behalf of the Malaysian NGO SMSL, found that the site lacks a sustainable concept for the long-term disposal of radioactive wastes under acceptable conditions.

The facility in Kuantan, Malaysia refines ore concentrate for rare earth metals. These strategic metals are used to produce catalysts, nickel metal hydride batteries and permanent magnets. The Institute point out that a number of emerging key- and future-technologies depends from the supply of these rare earths.

However, the ore concentrate being refined at the site also contains toxic and radioactive constituents such as Thorium.

The Oeko-Institute said that it was commissioned to perform a study to check whether the processing of the ore leads to hazardous emissions from the plant or whether dangerous waste will remain in Malaysia.

Insufficient storage of wastes

The Institute said that the storage of wastes that are generated in the refining process are to be stored in designated facilities on the site for three separate waste categories.

However, according to chemist and nuclear waste expert and project manager for the research, Gerhard Schmidt, there will be problems with the pre-drying of wastes that are of a high Thorium content.

“Especially in the wet and long monsoon season from September to January, this emplacement process doesn’t work”, says Schmidt. “The operator has not demonstrated how this problem can be resolved without increasing the radiation doses for workers.”

Additionally, the report found that the stores are only isolated with a one-millimeter thick plastic layer and a 30cm thick clay layer. This is insufficient to reliably enclose several metres high of wet waste masses.

According to Schmidt, Lynas needs to urgently address the situation, and in no event should it use or market the wastes as a construction material – as it is currently proposed both by the company and the regulator (AELB/MOSTI).

“According to our calculations this would mean to pose high radioactive doses to the public via direct radiation,” he warned.

Mass balance

The project manager said that one of the most serious abnormalities is that relevant data is missing from documents, which prevents reliable accounting of all toxic materials introduced.

He explained that it is not stated which toxic by-products, besides Thorium, are present in the ore concentrate, and in what quantities.

Schmidt was also critical of the plant’s emissions via wastewater, where only those constituents that are explicitly listed in Malaysian water regulation are accounted for – not all of the emitted substances.

Furthermore, the salt content of the wastewater was reported to be as high seawater. But it is discharged without any removal into the Sungai Balok river.

Oeko-Institute said that its scientists evaluated the deficiencies at the plant as very serious and warned that those deficiencies should have already been detected in the licensing process, when the application documents were being checked.

The organisation urged that for the safe long-term disposal of the radioactive wastes, a suitable site that meets internationally accepted safety criteria has to be selected urgently.

The full report can be downloaded HERE