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Risk Management Seminar – Lynas Rare Earth Project in Malaysia: Issues in Risk Management

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  On November 13, CAMPUS-Asia Program organized a Risk Management Seminar on “Lynas Rare Earth Project in Malaysia: Issues in Risk Management” delivered by Assoc. Prof. Dr. MD Nasrudin MD Akhir, the Executive Director of Asia-Europe Institute, University of Malaya in Malaysia. There were 26 attendants at the seminar. His presentation highlighted the issues of risk management involved in the operation of the ‘Lynas Rare Earth’ project.
  During the session, he highlighted the general background on ‘Rare Earth’ and its increasing demand worldwide, that might outstrip supply in the future. Currently, China produces about 97% of the world’s supply. On the other hand, ‘Rare Earth’ can be hazardous to human life because it is extracted from ores that contain some amounts of radioactive elements such as thorium and uranium. Therefore, this raises several health and environmental issues which are major concerns to the Malaysian population.
  He says that there is currently ‘Rare Earth’ project-Lynas plant, under construction in Gebeng, about 25km from the town of Kuantan in Malaysia, and if completed is expected to meet over 30% of the global demand of ‘Rare Earth’ materials outside China. During the operation of Lynas plant, environmental contamination (i.e. radiation, ground water, atmosphere and river pollution) are inevitable. He also gave examples of Asian Rare Earth at Bukit Merah in Malaysia (a project developed by Mitsubishi in 1980s) and also Mongolia where much of the world’s ‘Rare Earth’ supply is refined, have caused major environmental damage. Moreover, Dr. MD Nasrudin MD Akhir, mentioned that Lynas plant is scheduled to commence operations in early 2013 and will start supplying 22,000 tons of ‘Rare Earth’ concentrates per annum. The plant is expected to extract ‘Rare Earth’ minerals and store the refinery products in the safe and secure containers in specially prepared sites. But then, where are those sites, and will they be in Malaysia?
  He discussed that though the ‘Lynas’ project would serve the economic interest of the country, other voices are concerned with the environmental aspects of the plant. For instance there is intensified community and opposition pressure in Kuantan because of its environmental consequences and unclear waste management plan among other reasons. The health concerns are related to safety in transportation of raw materials and finished products; disposal of wastes and environmental protection at large. He says, no Malaysian wants the waste from the ‘Rare Earth’ ore because they are radioactive, and besides, there are also fears that some waste may pour in Kuantan River. As emphasis, he gave an example of ‘Rare Earth’ miner Molycorp in California that was shut down in the 1990s where tons of radioactive tailings spilled out into the California desert, and another ‘Rare Earth’ processing plant in northern region of China that has done untold damage to the livelihood of farmers and residents.

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  Furthermore, as a result of public concern, Malaysian government invited International Atomic Energy Agency (IAEA) to review the project that involved more extensive public consultation and waste management plan. The review found no instances of non-compliance of standards and gave several recommendations. However, there was no guarantee that the recommendations would be fulfilled and administered by either government or Lynas Corporation. In summary, the presenter says, though project preparation did not initially involve democratic procedures like: negotiation with local communities or voters, undertake environmental needs assessment as well as cost benefit analysis; the government of Malaysia is keen and firm to the project claiming that the project is safe and would bring economic benefits.