Malaysia Demands New Safeguards on Rare Earths Refinery

Posted June 30th, 2011 at 3:25 am (UTC-5)
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Malaysia says it will demand new safety measures from an Australian company at work on the first rare earth processing plant to be built outside China in decades.

If approved, the plant could meet up to 30 percent of the world’s demand for the minerals, used in high-tech products ranging from smart phones to cruise missiles. However, local residents are protesting the project, saying radioactive waste from the refining process could affect their health.

A nine-member team of experts, led by officials from the International Atomic Energy Agency, was generally positive about the project in a report released Thursday. But it said Lynas Corporation should make better plans for long-term waste management and for dismantling the plant at the end of its lifespan.

The government said it will not issue an operating license for the plant until the company complies with the IAEA recommendations. Earlier this month, the experts spent six days in Malaysia studying the project at the government’s request.

A previous rare earth refinery in Malaysia, operated by Japan’s Mitsubishi Corporation, was shut down in 1992 following protests from residents who blamed waste from the facility for an unusual number of birth defects and leukemia cases.

Lynas Corporation says the $230 million refinery project is being built using state-of-the-art technology and the fears are unfounded. The company plans to ship raw ore to the plant from mines in western Australia.

China has about 30 percent of the ore used in refining rare earths but controls more than 95 percent of world production because of environmental concerns and higher costs in other countries. But China has been steadily cutting export quotas of the essential materials, raising prices and prompting concern. Rare earth shipments to Japan were halted during a diplomatic dispute last year.