Lynas: Why Umno will collapse in the next general election

Lynas Corporation has two major operations: a mining and concentration plant at Mount Weld, Western Australia, and a refining facility now under construction at Gebeng, 25kms away from Kuantan, Malaysia – next to an impoverished fishing village.  The facility would be the first rare earth processing plant after about 30 years to be built outside China where barely regulated factories have left vast toxic and radioactive waste sites.

According to  reports, the refining facility was not given the green light to be built in Australia because of its potential danger to the environment. Australia is also home to an environmentally minded and politically powerful Green party. One of their fears is that the plant will leak radioactive and toxic materials into the water table in the ground, causing harm to the environment.  Understandably, countries with their own rare earth ore deposits are not always eager to play host to the refineries that process them.

Inviting Lynas to build its refinery in Malaysia has met with a lot of dissent from the local people but this has not been highlighted by the pro-UMNO media for fear that Lynas will be one the causes for the collapse of UMNO in the next general election. But the incumbent  government cannot stop the project that is about to complete its refinery complex, as there has already been an irrevocable agreement signed on this. Furthermore, millions of ringgit has been pumped into  building the sprawling complex.  The government is now faced with a Catch-22 quandary, but out of no choice and because of its contractual commitment to Lynas, the project has to continue to the displeasure of the people.

Refining rare earth ore usually leaves thousands of tons of low-level radioactive waste behind. Although rare earths are not radioactive in nature the potential hazard comes from the desired metals such as neodymium and yttrium being found in ore that contains radioactive thorium.

Is it a viable project?

The world thus far has largely left the grimy work to refineries in China that are hardly regulated and in some cases illegally operated. China has all this while created vast toxic and radioactive waste sites which have become an irritant to the environment and affected human lives.

In Gebeng, Kuantan the refinery is built nearby an area already environmentally damaged by the chemical plants that are found around the mud-spattered Balok River and several streams and tributaries that flow into the river and the nearby sea . It is built on a 250 acres of reclaimed porous tropical swamp land where any toxic waste can easily seep into the ground and hit the water table . Despite the potential hazards, the Malaysian government was eager for investment by Lynas,  Is it a viable project for Malaysians? It has been given a generous deal –  pioneer status including a 12-year tax exemption. However, it is only expected to employ about 350 high-skilled workforce – mostly foreigners. At the present rare earth prices, the refinery will be able to generate $1.7billion a year in exports beginning late next year. The company will make huge profits without paying any tax to the Malaysian government for at least 12 years.

But the ore processing is without doubt going to yield considerable amounts of thorium-containing tailings. The short and long term storage of this radioactive material is still a matter until now not resolved by Lynas. And hence the protests from residence living within the project vicinity is justifiable. The International Atomic Energy Agency (IAEA), however, was reported to have said that ‘the Lynas project’s overall design and planned operations procedures met international standards’. To the ordinary people, they feel that the report presumably did not examine construction details or engineering decisions involved in building the complex.

Shortcomings to the construction

It a New York Times report, it was revealed some of the ‘defaults’ in the construction of this project complex:

“… the problems  include structural cracks, air pockets and leaks in many of the concrete shells for 70 containment tanks, some of which are larger than double-decker buses. Ore mined deep in the Australian desert and shipped to Malaysia would be mixed with powerful acids to make a slightly radioactive slurry that would be pumped through the tanks, with operating temperatures of about 200 degrees Fahrenheit.”

“…. more critically the toxic, corrosive and radioactive nature of the materials being leached in these tanks, should they leak, will most definitely create a contamination issue.”

“…  that almost all of the steel piping ordered for the plant is made from standard steel, which they describe as not suited for the corrosive, abrasive slurry. Rare earth refineries in other countries make heavy use of costlier stainless steel or steel piping with ceramic or rubber liners.”

“….  that the concrete tanks were built using conventional concrete, not the much costlier polymer concrete mixed with plastic that is widely used in refineries in the West to reduce the chance of cracks.”

“…  that short cuts were taken on the construction of the LAMP that included the use of cheaper standard steel instead of the more expensive materials to deal with the radioactive, super heated and highly corrosive slurry used in the plant.”

“ … it is plagued by environmentally hazardous construction and design problems.”

“ …  that the refinery’s concrete foundations were built without a thin layer of plastic that might prevent the concrete pilings from drawing moisture from the reclaimed swampland underneath. The site is located just inland from a coastal mangrove forest, and several miles up a river that flows out to the sea past an impoverished fishing village.”

“…  that the blueprints called for the plastic waterproofing but that he was ordered to omit it, to save money.”

Cannot give a satisfactory explanation

Right or wrong, the people  have all the reason to be cautious for allowing Lynas to build the plant in Malaysia. The country’s  last rare earth refinery operated by the Japanese company Mitsubishi Chemical is now one of Asia’s largest radioactive waste cleanup sites. That plant  had to close down  in 1992 after many years of ugly protests by citizens.

Are Malaysians supporting an investment by a company that until today cannot give a satisfactory explanation on how best to dispose of rare earth wastes? Is the government  too desperate to attract Foreign Direct Investment (FDI that it has to rake in Lynas at the expense of health and a toxic-free environment?

Granting Lynas a temporary license (TOL) to operate its contentious rare earth processing plant in Kuantan  has in a way simply ignored the wishes of the people living in the vicinity and the country as a whole. The people are still doubtful as to whether there had been a thorough, impartial and transparent  Environmental Impact Assessment (EIA) conducted on the viability of this project. They sense that health and social impact assessments are imperative if project of this nature were to be undertaken in any country. But these tedious but necessary processes are usually ignored by foreign capitalists in most poor and developing countries, as in some cases authorities can easily be bribed to bulldoze through their plans.

Nevertheless, in the Malaysian context the Atomic Energy Licensing Board’s (AELB) has decided to grant a TOL to the Australian company with ‘conditions’. It was reported that the TOL was approved with several ‘stringent’ requisites attached. But this only confirms that there are still disconcerted issues relating to the  Lynas’ Radioactive Waste Management Plan (RWMP).  The citizens believe  that the RWMP has not been fully finalised yet by Lynas. But why the TOL when matters of public interests are still ambiguous and unsettled?

Has been rejected in Australia

So many foreign capitalists in poor, developing and labour-cheap countries are embroiled in radioactive and toxic industries in the hosts’ backyard and  China is one of the countries worst hit by these unscrupulous investment practices. The rich countries are inclined to use the  third or developing world as their ‘rat laboratory’ when dealing with live threatening toxic wastes. Somehow or rather some big companies know the tricks to manoeuvre, as they can always ‘grease the palms’ of those in power to get through their mission and shortcomings.  Despite having independent consultants to evaluate many of these companies and check on their compliance with the set standards and rules, in the final analysis nothing much can be done to stop their dire operations.

As for Malaysia, the people have their rights to fear that this dirty capitalist modus operandi happening in other countries could happen in their country as well.  The Lynas plant at Gebeng is obviously not well-received by the people. Apparently,  the government cannot halt this project because of contractual agreements and thus adamant that it has to proceed. They could have made a mistake in allowing the refinery that many other countries had turned down to be built in this country.

Majority of those surveyed in the adjacent area and in Kuantan City felt that Lynas is exporting their ‘contaminated’ industry into this country. They are aware that Lynas  had failed to set up the plant in Terengganu but managed to convince the state government of Pahang to have it built in the state.

Residence around Gebeng and nearby Kuantan are understandably angry that a project that has been rejected in Australia has been brought to their backyard.  All Malaysians who care for health than profits are fully against the setting up of the plant here and they would prefer Lynas refines the rare earth in their own backyard (Australia). The people are  just asserting their rights as a community.

Is not the voice of one MP

The opposition to the Lynas plant is not the voice of one MP as highlighted by pro-UMNO media but thousands of residence in Kuantan and the nearby villages.  The fear of radioactive wastes sifting into close by land, the atmosphere and also the streams and rivers that flow into the nearby sea is scaring the people in this area. Among those living nearby this plant are farmers, fishermen, government servants, businessmen and those self-employed. The survey found almost 97 percent of the people here are not happy with the plant being built in their locality.

An entrepreneur  who has shelved a project to build  residential units in a nearby area had this say, “We had the plans ready and we made a survey of potential buyers. Unfortunately we have to put the project on ice as our market survey showed a poor response from potential buyers. We hardly have buyers. We have spent so much money on the initial stages of getting the plans ready. Looks like we have to reduce the prices of out units but this may not work either. It is going to be at a loss. We have to wait and see.”

A  real estate agent based in Kuantan was equally disappointed with the Lynas plant, “There has been so much publicity given on the Lynas plant. Of course, the people are negative about the whole thing. We are not able sell properties around this region anymore. Those who have bought properties here are stuck and more interested in selling them but they just don’t have buyers. Prices of properties are dropping around this area. The Lynas plant has contributed to this phenomenon.”

Built within walking distance from the nearest residential area the plant is invoking fear in the hearts of the villages. Among them are educated and less educated villagers. A 51-year-old farmer from Balok said, “ I am not educated but I am aware of the danger of radioactive from such plants. I have seen enough of this kind problems happening in other countries on our TV stations.”

A 45-year-old fisherman from the same village was too aware of the problems that are going to happen when the plant starts operating. He was very emotional when asked about the threat of radioactive wastes being washed into the nearby sea. “ Our catch has been decreasing all this while. The sea water is already dirtied with chemicals, oil slicks and other wastes from nearby industries and hotels. I fear that with any flow of radioactive wastes from the Lynas plant would endanger the rivers, streams, wells and the sea. This will pose more danger to human and sea life.  People may not even buy fish from here for fear that the fish are contaminated. “

A 60-year-old farmer in Sungai Ular here had this to say: “The river and streams here are no more clean. We are poor and we fear for our livestock as much as our life. We also fear for our crops that help sustain our life. And now with Lynas in out midst.”

“It is a carcinogen,” said a doctor who runs a clinic at a nearby town. “ Leukemia victims whose illnesses have attributed to the old Mitsubishi Chemical refinery in the country. And do we want to repeat this?”

Story telling

Malaysians are not against foreign direct investment (FDI). No political parties have voiced their opposition to FDI in the country. They are welcome. But not an investment that can be detrimental to the people’s well being. They do not want the ‘rejects’ of Australia or Japan to come and invest in this country. The view held by some that by blocking Lynas plant is going to cause instability for FDI does not hold up. Even investors are aware of the danger in investing in regions where toxic industries are found. “The government seems to ignore  the deep concern of the people over this toxic Lynas plant,” said a government school teacher in Beserah, Kuantan.

Has Lynas disclosed the details of its Permanent Disposal Facility (PDF) to the public? Would Lynas take the responsibility of waste management when it was reported that the toxic waste may probably be disposed on a remote Island off Pahang coast? Would this then not seep underground and affect the sea water? Or would they be sending back the toxic waste to Australia or any other source? Would Australia agree to accept this toxic residue? It was reported that Australia would not. Then would they dump the toxic waste into the sea? There is so much ambiguity in the RWMP, as it was also reported that the Lynas had plans to recycle and commercialise the residue.

It was reported that the TOL was granted ‘after getting public feedback’. The people are doubtful as to which ‘public’ they are referring to.  “ This is mere ‘story telling’,” said a government servant attached to the Pahang state government.

Lynas as an investor in the country is not something to be proud of. When Selangor and Penang are able to attract feasible investments that do not give any adverse impact  on  the ecosystem, Pahang unfortunately has attracted a wrong ‘depositor’ that until today is not able  to deal with rare earth waste residue that the plant is going to produce.

We cannot expect much from Lynas

The long-term storage of the Lynas plant’s radioactive thorium waste is still unresolved. It was reported that one of the top Lynas executive said, “I have complete confidence in the Malaysian environmental standards and our ability to meet the requirements.” But Malaysian have all the reason to be cautious: Its last rare earth refinery, operated by the Japanese company Mitsubishi Chemical was very damaging to the environment.  Concerns forced the closing of all rare earth refineries in Japan because of radiation. Mitsubishi then moved its refining operation to Malaysia after being phased out by Japan resulting in some parts of the country now becoming one of Asia’s largest radioactive waste cleanup sites. A mess was created in China where toxic waste was dumped on a non-regulated basis, then it was the Mitsubishi fiasco to the local environment.  The people thus cannot be assured of safety from the Lynas plant  in Gebeng, Kuantan.

It seems that the Lynas complex will house the latest in pollution control equipment and radiation sensors. There will be 12 acres of interim storage pools that will be lined with dense plastic and sit atop nearly impermeable clay, to hold the radioactive by-products until they can be disposed of. But the people are more interested  to know where will the toxic wastes be disposed of. Pollution from other chemical factories in the vicinity has affected the sea where fishing is the main source of income for more than 30 percent of the population here . They do not want Lynas or other chemical companies  to open any more factories to ruin their livelihood.

It was also reported that the CEO of Lynas said, ”The company had approvals to build its refinery in Australia and rejected that option because it couldn’t find a site that met its requirements.” This is a ridiculous statement coming from an Australian-owned company. Australia is more than 60 times larger than Malaysia with a vast area of arid and empty desert and yet the CEO is telling Malaysians that he could not find a ‘suitable’ place to build the refinery in his homeland. Malaysians are not ‘dummies’ to fall for this kind of statement. If truth be told, the Australian government is more aware of the danger of toxic radiation and does not welcome the setting up the Lynas refinery in the country. What has been rejected by a developed world has been taken over by Malaysia – a developing country.

Lynas will, without doubt , become  a hot issue in the coming general election. It is going to affect the pattern of voting in this region.

Malaysia Chronicle