Rafizi: Rare earth policy not hypocritical, to stop abuse by state govts

EXCLUSIVE | While one of the themes stated in the 12th Malaysia Plan (12MP) mid-term review is on “advancing green growth” to move towards a low-carbon nation, the government also said it will develop a policy to unlock the value of rare earth elements (REE).

The policy - which Prime Minister Anwar Ibrahim said is intended to prevent the exploitation of REE and resource loss and will guarantee “maximum returns for the country” - has since been viewed as hypocritical considering the environmental impacts of mining activities.

This is especially since the lucrative rare earth deposits that the plan estimates can boost the GDP by RM9.5 billion are sitting under rainforests - crucial carbon sinks.

However, Economy Minister Rafizi Ramli, who is spearheading the 12MP, has dismissed such claims.

In fact, Rafizi said it’s pertinent for the federal administration to develop a framework to ban REE export to stop state governments from approving mining activities at their whims or Malaysia would risk losing such minerals in totality in the next two to three years.

“This is actually why we have to expedite this (framework). The forests and minerals are under state jurisdiction. They (the state government) can do what they would like.

“To make it worse, from a national perspective, we really don’t get any value by just exporting the raw materials,” he told Malaysiakini in an interview at his office this week.

He said without such a framework, states would be free to allow exploration and mining companies to mine for rare earth and export the raw materials, getting little in return.

Rare earth minerals

“And in no time, suddenly, they have extracted everything and the country doesn’t get anything except for the mess with the environment and the mines that they leave behind,” Rafizi said.

Mining already started

Rare earth mining has already commenced in some states, including Kedah where on July 18, an anti-corruption probe was initiated against Menteri Besar Muhammad Sanusi Md Nor for alleged abuse of power over REE mining in the state.

The mining was allegedly conducted illegally and resulted in losses to the state government.

Several investigation papers had been opened under Section 17(A) and Section 23 of the Malaysian Anti-Corruption Commission (MACC) Act 2009.

Yesterday, MACC chief Azam Baki told the New Straits Times that Sanusi will be called in within the next two weeks over the REE mineral theft issue.

The top graft buster said MACC's investigations into this case were almost completed.

Not apple-to-apple comparison with Lynas

Meanwhile, Rafizi said it would only be logical for Putrajaya to want to develop the whole stream of the REE industry covering upstream, midstream, and downstream, not just in exporting the raw minerals.

He also asserted that the government’s move to develop the rare earth industry in Malaysia should not be compared to operations that had been done by rare-earths producer Lynas Corporation - which processes materials imported from Australia.

“Our principle is that whatever (minerals that) is ours, we’ll manage it, we’ll get the best value for it. We can balance the cost and the risk of storing it here.

“It’s actually not apple-to-apple with Lynas. The rare earth (that Lynas processes) is from Australia, it is sent to us here for upstream processing, leaching, and so on to remove the waste.

“The waste is kept here. The intermediary product, which is where the value is, is sent back.”

However, he admitted that the government has yet to find a solution to mining REE minerals in an environmentally sustainable way.

“I don’t necessarily have all the answers now but that is the government policy.

“The way it works in the civil service in government is that once a policy has been made, all these concerns will be mapped out and it comes as a regulation one after another.

“So the concerns about striking a balance between environmental concerns and the best practices for extraction, all that are the kind of things that we need. But now, we don't (have a framework),” he explained.

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Pilot study in Gerik on ‘less damaging’ mining

The government is reported to be conducting a pilot project using a method called in situ leaching at a rare earth mine in Gerik, Perak, to determine the standard operating procedure for mining such minerals.

According to the environment news website Macaranga, the process is considered “less damaging” because the forests need not be cleared and or excavated but chemicals are used to pull the minerals out.

There is a risk of groundwater contamination, but so far, those conducting the trials said the pilot project in Gerik has not caused such pollution, Macaranga reported.

On Wednesday, Natural Resources, Environment and Climate Change Minister Nik Nazmi Nik Ahmad was reported as saying that the SOP for REE mining is expected to be enforced this year.

Nik Nazmi said a Minerals Industry Development Coordination Committee meeting will be held on Oct 2 to discuss matters related to the proposed expansion of the SOP throughout the country.

The government has also imposed restrictions on some of Lynas’ operations due to concerns regarding radiation levels from cracking and leaching, a matter that Lynas has disputed.