An Australian company involved in processing rare earths asked Malaysia on Tuesday to maintain a scientific approach in reviewing its refinery, as the government began an investigation that could threaten one of the only sources of supply of elements vital in the manufacturing of high-tech products such as smartphones.
Lynas Corp., in an open letter to the government published in local media, acknowledged the government’s right to conduct a review and vowed to cooperate. It also emphasized the public’s expectation of high standards of fairness and openness "as seen in other recent initiatives of the new government.”
“I am appealing to the government to apply those same high standards – to be fair and just and to be objective and scientific – in any review of Lynas Malaysia,” CEO Amanda Lacaze said.
Lynas mines rare earths out of a collapsed volcano in Australia and ships them to a sprawling industrial complex in Kuantan, capital of Malaysia’s Pahang state, to be refined.
Rare earths – minerals such as cerium, lanthanum and neodymium – are used in electronics, including televisions and smartphones. Refining is done on a large scale in only two places on earth: China and Malaysia.
Speaking to reporters in Kuala Lumpur after the open letter was published, Lacaze said the company had secured license to open the plant in Australia but was invited by the previous Malaysian government to consider investing in the country.
“We were offered an exciting investment opportunity here in Malaysia and to be close to our market,” Lacaze said, as she expressed concern about the review committee chaired by Fuziah Salleh, the assemblywoman representing Kuantan.
In 2011, Kuantan residents, championed by their representative in parliament, opposed the refinery’s construction.
Lynas published its reaction after Fuziah, a deputy minister in the prime minister’s department, told reporters in Kuala Lumpur that the three-month review of the processing plant would focus on the plant’s radioactive waste management and its impact on the environment. .
Rare earths, which are made up of 17 elements found in the ground all over the world, are not actually rare and processing involved a complex and expensive process. Lynas said it produces about 12 percent of the world output and Chinese companies account for more than four-fifths, according to the New York Times.
Activists said that while Lynas’ $800 million plant in Kuantan broke China’s near-monopoly on producing the prized elements, the processing also left behind low-level radioactive waste.
But Lacaze defended her company, saying that after six years of operation, the background radiation up to 12.4 miles from the plant had not shown any sign of change.
“Air crews are exposed to seven times more radiation per year than our own staff who works directly with the material,” Lacaze said, referring to airline pilots and flight crews.
She said the International Atomic Energy Agency sent experts to evaluate the plant in 2011 and 2014 and was satisfied their recommendations were put in place by Lynas.
“According to IAEA, the plant has intrinsically low risk,” Lacaze said.
Lynas claims the refinery can produce up to 20,000 tons of praseodymium and neodymium, elements essential in manufacturing high-tech components used in mobile phones and hybrid cars.
The refinery produces a waste material, a radioactive substance called gypsum that is handled and is stored in an on-site facility constructed according to the appropriate international standards, the company said.
On Sept. 3, 2016, the government renewed the Lynas license through September 2019.
Fuziah previously argued that while the waste material has low-level radiation, it has a long half-life and therefore leaves a longer-lasting effect on the environment.
“Furthermore, the whole operation was shrouded in secrecy and even my questions in the parliament regarding the plant was not entertained,” she said, adding that the government of former Prime Minister Najib Razak was easy on the company.
Fuziah, in response to the published open letter, issued a statement saying the government led by Prime Minister Mahathir Mohamad promised a safe environment in its pre-election manifesto.
Mahathir and the Pakatan Harapan alliance took power after defeating Najib’s Barisan Nasional coalition in the May general election.
“Promise 39 of the Pakatan Harapan Manifesto under the heading ‘Balancing Economic Growth with Environmental Protection’ states that ‘The Pakatan Harapan Government promises to govern the country based on the principles of sustainability and sustainable development,” Fuziah said.
“In short, it will be an environmentally friendly government,” she said.
Lynas reported it has committed 25 million ringgit (U.S. $6 million) over five years to join with the Universiti Malaysia Pahang to research viable uses of the waste material.
The company has not ruled out packing up and leaving the country if the situation calls for it, but Lacaze said Lynas has invested heavily in Malaysia and, in the process, created jobs.
“Anything can be done,” Lacaze said. “We will not be out of business.”