Malaysia allows Australian firm to process rare earths through 2026

Iman Muttaqin Yusof
Kuala Lumpur
Malaysia allows Australian firm to process rare earths through 2026 Chang Lih Kang, Malaysia’s minister of Science, Technology and Innovation (left), speaks to reporters in Kuala Lumpur about allowing rare earths processor Lynas to continue operations at Malaysia plant, Oct. 24, 2023.
Vincent Thian/AP

Malaysia announced Tuesday that it had updated the operational license for Australian rare-earth miner Lynas to allow the firm to import raw radioactive materials for processing until March 2026, provided that Lynas makes the waste safe from radioactivity.

The Atomic Energy Licensing Board had determined that Lynas could process the rare earths in Malaysia to ensure that radioactive waste was neutralized, said Chang Lih Kang, the minister of Science, Technology and Innovation. He called it a win-win situation for the company and Malaysia.

“Before this our concern was we did not want continuous accumulation of radioactive waste in Malaysia. So, we did not allow them to import and process it, because that would produce radioactive waste,” he said during a news conference. 

The Malaysian government had been concerned that thorium would not be extracted properly from the rare earths mined in Australia and shipped here.

Lynas is the world’s largest rare-earth producer outside of China – Beijing maintains a near-monopoly of 80% on rare earth production. Rare-earth ores are key ingredients for wind turbines, electronics and military technologies. 

Last week, Lynas announced it would halt its operations in Malaysia starting Jan. 1 over radiation concerns. The company had been preparing its Kalgoorlie facility in Australia to operate as a backup measure.

The Lynas plant in Gebeng, Kuantan, 264 km. (164 miles) from Kuala Lumpur, had faced scrutiny over a lack of a safe disposal solution for its radioactive and toxic wastes.

Chang said Lynas’s permanent disposal facility, which has a capacity of 1.6 million metric tons, holds 1.2 million metric tons of waste.

Chang said the decision aligns with the government’s effort to prevent radioactive waste, noting that thorium can end up generating income for Malaysia.

“The thorium can be upgraded into fuel-grade and can be sold as a commodity,” he said.

While Malaysia does not have a nuclear power plant, thorium can be sold to other countries that have plants or it can be used in other sectors, he said.

In February, Malaysian officials rejected Lynas’ bid to continue operating parts of its facility after July 1 and ordered the company to move radioactive waste-producing processes out of the country. Despite that, Lynas received a three-year license renewal for its other processing operations. 

In May, the government granted Lynas a six-month extension to manage its radiation issues, recognizing the minerals’ vital role in global high-tech industries.

24 MY-rare-earth3.jpg
A laborer operates a bulldozer during construction of the Lynas processing plant in Gebeng, Malaysia, April 19, 2012. [Saeed Khan/AFP]

Research, development

Lynas’s license is conditional on an annual investment of 1% of its gross sales in Malaysia for research collaboration with nuclear authorities to reduce radioactive waste.

The company’s research and development investment in Malaysia amounts to 0.5% of its gross sales, Lynas CEO Amanda Lacaze said in a statement, adding that the company has invested more than 3 billion ringgit (U.S. $627 million) in Malaysia.

“The R&D program will be overseen by the Malaysian Atomic Energy Licensing Board and will be directed towards developing methods for removal of naturally occurring radioactive material from residues.

“As the leading producer of rare earths outside of China, Malaysia plays an important role in the global rare earths supply chain. This decision provides a strong foundation for further development of the Malaysian rare earths industry,” the statement said. 

Environmental concerns

Two environmentalists questioned the feasibility of whether the extraction method would ensure that residue waste from the rare earth process is free from radiation.

“This government must prove to the people that what Lynas promised is both feasible and trustworthy. The government’s regulatory authorities will play their roles to ensure strict adherence to the terms upon which this extension is granted,” Tan Bun Teet, chairman of Save Malaysia Stop Lynas, told BenarNews. 

“According to the minister’s statement, Lynas claims it will produce less waste with its new proposal. However, the lingering question is how they will manage over 1 million tons of radioactive waste, waiting to be 2 million tons per day.

“There is a lack of explanation and detailed documentation to demonstrate the feasibility of this. Has the minister exercised due diligence to ensure the viability and practicality of what he mentioned in his official statement,” he asked.

Environmentalist Mageswari Sangaralingam of the NGO Friends of the Earth Malaysia urged the government to be transparent. 

She said current residues are above safe levels, adding the method to extract radioactive materials from the residue is unclear and questionable.

“No explanation has been given on how the radioactive level is going to be brought down,” she said in a statement.


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