The government is expected to renew the licence for Lynas to continue operating its processing plant in Gebeng, Kuantan. The license is set to expire on March 2.
However, sources familiar with the matter told Malaysiakini it is likely that the firm must abide by the two key conditions set by the Pakatan Harapan government in 2019.
One of the conditions is to relocate the “cracking and leaching” facility, which produces radioactive Water Leach Purification (WLP) residue, out of Malaysia before July 2023.
Since it was set up in 2012, Harapan leaders had objected to the plant but former premier Dr Mahathir Mohamad’s administration renewed the licence with conditions after the coalition won the 2018 general election.
This put Harapan parties, especially DAP, in an awkward position as it previously demanded the BN government to shut down the rare earth processing plant.
For example, former environment minister Yeo Bee Yin, who is a DAP lawmaker, expressed disappointment over the matter in her book ‘The Unfinished Business’.
She dedicated an entire chapter to how she was forced to amend the licence condition from “moving out the radioactive waste” to “constructing a ‘cracking and leaching’ facility elsewhere”.
The licence for Lynas has become a hot potato subject for Harapan and the new Science, Technology and Innovation Minister Chang Lih Kang from PKR when the coalition returned to power after forming an alliance with BN last November.
US wants Lynas to keep operating
Sources claimed that the minister, who is a PKR vice-president, and the cabinet are caught between a rock and a hard place, having to manage between pressure from foreign powers and the expectations within PKR as well as from voters.
One source close to the government told Malaysiakini that the United States, Australian, and Japanese governments are “concerned” about whether the licence would be renewed.
A month after Chang became minister, US ambassador to Malaysia Brian D McFeeters visited the ministry and had a meeting with the latter.
Two sources confirmed that McFeeters lobbied the government to renew Lynas’ license.
On Feb 7, Australian high commissioner to Malaysia Justin Lee visited Chang to discuss various “cooperation opportunities”. Officers from the Department of Atomic Energy (Atom Malaysia) - which oversees Lynas’ license - were also present at the meeting.
The rare earth products produced by Lynas are internationally strategic resources for the US, Australia, and Japan, used in the manufacturing of smartphones, electric cars, engines for military jets, and others.
China is the biggest supplier of rare earth, with a 60 percent share of global production while other suppliers include the US, Myanmar, Australia, and Madagascar.
When the trade war between US and China escalated, the US and its allies became concerned about rare earth processing industries outside of China, including in Malaysia.
The US Department of Defense signed a contract with Lynas in July 2020 to provide the firm with US$150 million (RM649 million) to build rare earth processing facilities in Texas.
Another source told Malaysiakini that the government technocrats in Chang’s ministry were also in favour of renewing the licence.
“The technocrats were also agreeable to let Lynas continue the ‘cracking and leaching’ process in Gebeng,” the source said.
Concerned about public backlash
Meanwhile, the PKR-led government is also concerned about the backlash. For instance, when the Harapan administration renewed Lynas’ licence in 2019, civil societies mobilised a protest.
The then Bentong MP Wong Tack, an activist-turned-DAP politician who became prominent for his anti-Lynas campaign, faced intense criticism and was told to resign.
Numerous Pahang PKR leaders were also strong opponents of Lynas before Harapan won the 2018 polls such as former Kuantan MP Fuziah Salleh (current senator) and former Semambu assemblyperson Lee Chean Chung (current Petaling Jaya MP).
This has led PKR to be extra cautious in managing public perception and to avoid being accused of making false promises.
Speaking to Malaysiakini yesterday, Lee conceded that Lynas excelled in lobbying but hoped that the government would not backpedal on the condition to move the “cracking and leaching” facility back to Australia.
“I hope the government can make Lynas fulfil this promise, I think it's not easy… But our struggle for many years must be recognised,” said the Petaling Jaya MP.
Meanwhile, another source told Malaysiakini that PKR is concerned that the decision to renew the licence would be perceived as the party’s “direct decision”.
“If the license is approved and PKR is seen as making a U-turn, the opposition will train their guns on PKR,” the source added.
Tan Bun Teet, the chairperson of Save Malaysia Stop Lynas, which is another core group of the anti-Lynas movement, confirmed that he reiterated the call to move the “cracking and leaching” facility elsewhere when he met Chang.
He also told the minister that the government must improve the location, design, and manner in which the permanent disposal facility (PDF) is conducted.
“Lynas had outsourced the PDF project to a company that doesn’t have related experience,” he added.
Two weeks ago, Lynas managing director Amanda Lacaze said the firm is preparing for the worst-case scenario - a partial shutdown of its operations in Kuantan.
However, based on statements by politicians and NGO leaders, it appears there is a reluctant compromise - asking Lynas to relocate the “cracking and leaching” facility.
Would Lynas be able to do this by July?
If it fails, would the government force the plant to shut down or would the firm be granted an extension? - Mkini
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