Government Sets New Rules for Rare Earth Refinery

Malaysia's government set new conditions for the plant amid public fears of health and environmental risks.

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Lynas Corp. Ltd.

KUALA LUMPUR, Malaysia (AP) — Malaysia's government extended Australian miner Lynas Corp.'s license to operate a rare earth refinery for six months on Thursday but set new rules for it to tackle radioactive waste amid renewed public fears of health and environmental risks.

Lynas has been operating its Malaysian refinery, the first outside China producing minerals that are crucial to high-tech manufacturing, in central Pahang state since 2012 but it hasn't dealt with low-level radioactive waste accumulating at its plant.

The Atomic Energy Licensing Board said Lynas' operating license, which expires Sept. 2, will be renewed for another six months but it must move its cracking and leaching process — which produces the radioactive waste from Australian ore — out of Malaysia in four years.

It said in a statement that Lynas will also have to identify a site to construct a permanent disposal facility in the country or get written approval from a country willing to accept more than 580,000 tons of waste stockpiled at its refinery which is exposed to possible floods and other natural disasters. It told the miner to halt plans to process the waste into agricultural soil conditioner.

The Lynas issue has put Prime Minister Mahathir Mohamad's government, which won a stunning victory in general elections in May 2018, in a tight spot. Some members of the current government previously opposed Lynas' operation in the country, citing high risks of pollution.

Cabinet members are also divided, with Entrepreneur Minister Mohamad Redzuan Yusof supporting rare earth as a strategic industry that could open doors for new investment in the country. But Environment Minister Yeo Bee Yin insisted that Lynas must remove its waste before its license can be renewed. Australia has said it won't accept the waste.

Mahathir, however, said earlier this month the government would drop a requirement for Lynas to repatriate its radioactive waste as a precondition for its license renewal. Last week, he said expert studies showed it was "very low level" radioactive waste and the government cannot just expel Lynas because other foreign investors are watching the government's actions.

Rare earths are 17 minerals used in the manufacture of products such as hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights and camera lenses. China has about a third of the world's rare earth reserves but a near monopoly on supplies. The Lynas case has become more pressing in the current trade war between the U.S. and China, which has in the past placed restrictions on its rare earth exports. Lynas has said its refinery could meet nearly a third of world demand for rare earths, excluding China.

Environmentalists groups earlier decried any attempts to renew Lynas' license without it exporting the waste. The group Friends of the Earth said the radioactive elements, which include thorium and uranium among others, was not in its natural form but been made more dangerous by mechanical and chemical processes.

"We wish to reiterate that Malaysia must not be treated as a dumping ground for hazardous waste and that the government must put the long-term interests of public health and the environment ahead of the interests of foreign companies whose operations generate toxic wastes," it said in a statement ahead of the government's decision.

Malaysia's last rare earth refinery — operated by Japan's Mitsubishi group in northern Perak state — was closed in 1992 following protests and claims that it caused birth defects and leukemia among residents. It is one of Asia's largest radioactive waste cleanup sites.

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