Bloomberg – Malaysia to Put Safety Terms on Lynas Plant

By Manirajan Ramasamy and Gan Yen Kuan – Jun 30, 2011 9:36 AM GMT+0800

 

Lynas Corp. will only be granted a license for a Malaysian rare-earth refinery if it implements recommendations made by a panel of experts that may take a year to complete, an official familiar with the matter said.

The Sydney-based company will need to satisfy 11 conditions, including technical and safety measures as well as a decommissioning plan for the plant that’s nearing completion in Malaysia’s eastern Pahang state, said the person, who couldn’t be named as the information is confidential.

Lynas had planned to process ore from its Mount Weld mine in Western Australia at the plant from September. Delaying output may further tighten the rare earths market where prices have more than doubled as the biggest producer, China, cuts export quotas.

“Any project delays will just make the minerals more valuable and send prices higher,” Peter Strachan, who heads Perth-based independent advisory firm StockAnalysis, said by phone from Perth. “You would have expected Lynas to have ticked all the boxes and done all the appropriate feasibility, environmental and regulatory work.”

Lynas today halted its shares from trading pending an update on the plant review. Its shares have fallen 3.9 percent since the start of the year. Matthew James, a Lynas spokesman, declined to comment when contacted by e-mail today.

Briefing Today

The International Trade and Industry Ministry will hold a briefing on the review in Kuala Lumpur today, following recommendations by a panel of experts appointed by the International Atomic Energy Agency, according to a media invitation.

Rebecca Fatima Sta Maria, the ministry’s secretary-general, declined to comment when contacted by Bloomberg News late yesterday.

Prices of rare earths, 17 chemically similar elements used in lasers, plasma televisions and hybrid cars, have more than doubled since the first quarter. China, which controls over 90 percent of the global market, further restricted rare-earth mining while cutting exports to conserve resources and protect the environment.

Local residents and non-governmental organizations have lobbied to stop Lynas from operating the plant over radiation fears. Risks arising from the project outweigh economic gains, Fuziah Salleh, a local member of parliament, said on April 22.

The Southeast Asian nation’s government asked the IAEA to appoint an independent international panel to look into public concerns before allowing the miner to import minerals.

Televisions, Hybrid Cars

Lynas wants to tap growing global demand for its minerals that are used in Apple Inc. (AAPL)’s iPod music players, flat-screen televisions and hybrid cars.

The company said in a statement on April 22 its refinery is safe and presents no hazard to the public and its workers.

Protests over the past three months, including a march on Parliament and the Australian High Commission in Kuala Lumpur, took place following leakages at Japan’s nuclear power plants after the March 11 earthquake and tsunami.

To contact the reporters responsible for this story: Manirajan Ramasamy in Kuala Lumpur at rmanirajan@bloomberg.net; Gan Yen Kuan in Kuala Lumpur at ykgan@bloomberg.net.

To contact the editor responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net.

 

Lynas’s Malaysian plant may be delayed for years

June 30, 2011 – 3:39PM

www.wealthdaily.com/lithium-report

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Australian miner Lynas will only be granted licenses for a Malaysian rare-earth refinery after implementing recommendations made by a panel of experts which could take up to two years to complete, the government said.

Lynas, which suspended its shares today in Australia today, had planned to process ore from its Mount Weld mine in Western Australia from September at a plant under construction in Malaysia’s eastern Pahang state.

Delaying output may further tighten the rare earths market where prices have more than doubled as the biggest producer, China, cuts export quotas.

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The panel appointed by the International Atomic Energy Agency found no breach of radiation standards, the government said in a statement today. Even so, the miner must satisfy 11 conditions, including environmental monitoring and long-term waste management, Rebecca Fatima Sta Maria, secretary- general of the Southeast Asian nation’s international trade and industry ministry, told reporters in Kuala Lumpur.

“Until this is done, the status quo remains: there will be no importation of raw materials into the country, and no operational activities will be allowed on site,” said a joint statement from International Trade and Industry Minister Mustapa Mohamed and Maximus Johnity Ongkili, minister of science, technology and innovation.

‘Higher prices’

Lynas has fallen 3.9 per cent since the start of the year. Matthew James, a Lynas spokesman, declined to comment when contacted by e-mail today. The company will hold a briefing in Kuala Lumpur at 3 p.m. local time, according to a media invitation.

“Any project delays will just make the minerals more valuable and send prices higher,” Peter Strachan, who heads Perth-based independent advisory firm StockAnalysis, said by phone from Perth. “You would have expected Lynas to have ticked all the boxes and done all the appropriate feasibility, environmental and regulatory work.”

Prices of rare earths, 17 chemically similar elements used in lasers, plasma televisions and hybrid cars, have more than doubled since the first quarter. China, which controls over 90 per cent of the global market, further restricted rare-earth mining while cutting exports to conserve resources and protect the environment.

Local residents and non-governmental organisations have lobbied to stop Lynas from operating the plant over radiation fears. Risks arising from the project outweigh economic gains, Fuziah Salleh, a local member of parliament, said on April 22.

Televisions, hybrid cars

Lynas wants to tap growing global demand for its minerals that are used in Apple’s iPod music players, flat-screen televisions and hybrid cars.

The company said in a statement on April 22 its refinery is safe and presents no hazard to the public and its workers.
Protests over the past three months, including a march on Parliament and the Australian High Commission in Kuala Lumpur, took place following leakages at Japan’s nuclear power plants after the March 11 earthquake and tsunami.

It may take one to two years for all the IAEA’s recommendations to be completed Sta Maria said. A follow-up review should be conducted in this period, IAEA said in its report.

The trading halt will remain in place until Monday, July 4, or until the announcement is made.

Bloomberg, AAP
Read more: http://www.theage.com.au/business/lynass-malaysian-plant-may-be-delayed-for-years-20110630-1grxy.html#ixzz1Qk93aIRv

The New York Times – The Fear of a Toxic Rerun

Rahman Roslan for The New York Times

The project in Malaysia would be the first rare earth processing plant in nearly three decades to be finished outside China.

By
Published: June 29, 2011

KUANTAN, Malaysia — A $230 million refinery being built here in an effort to break China’s global chokehold on rare earth metals is plagued by environmentally hazardous construction and design problems, according to internal memos and current and former engineers on the project.

Reuters

Protesters at the rare earth plant in Malaysia.

The plant, which would be the world’s biggest refinery for rare earths — metals crucial to the manufacture of a wide range of technologies including smartphones, smart bombs and hybrid cars — has also become the target of protesters who fear that the plant will leak radioactive and toxic materials into the water table.

Weekly demonstrations have drawn crowds since March, and someone recently threw gasoline fire bombs at the gated home of a senior project manager.

Some risks had been expected from the plant, which would refine rare earth ores into manufacturing-grade materials. Although rare earths are not radioactive, in nature they are usually found mixed with thorium — which is.

That is why the Lynas Corporation, an Australian company, promised three years ago to take special precautions when it secured the Malaysian government’s permission to build the sprawling complex here on 250 acres of reclaimed tropical swampland. It would be the first rare earth processing plant in nearly three decades to be finished outside China, where barely regulated factories have left vast toxic and radioactive waste sites.

Lynas has an incentive to finish the refinery quickly. Export restrictions by China in the last year have caused global shortages of rare earths and soaring prices. But other companies are scrambling to open new refineries in the United States, Mongolia, Vietnam and India by the end of 2013, which could cause rare earth prices to tumble.

Lynas officials contend that the refinery being built here is safe and up to industry standards, and say that they are working with its contractors to resolve their concerns.

“All parties are in agreement that it is normal course of business in any construction project for technical construction queries to be raised and then resolved to relevant international standards during the course of project construction,” wrote Matthew James, an executive vice president of Lynas, in an e-mail on Wednesday night.

Trading in Sydney of Lynas shares was halted on Thursday morning pending a company announcement. Malaysia’s ministry of international trade and industry scheduled a news conference late Thursday morning and was expected to announce what changes in the project would be required by the government after a review by a team from the International Atomic Energy Agency.

But the construction and design may have serious flaws, according to the engineers, who also provided memos, e-mail messages and photos from Lynas and its contractors. The engineers said they felt a professional duty to voice their safety concerns, but insisted on anonymity to avoid the risk of becoming industry outcasts.

The problems they detail 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.

The engineers also say 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.

The engineers also say 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.

Documents show that Lynas and its construction management contractor, UGL Ltd. of Australia, have argued with their contractors that the cracks and moisture in the concrete containment walls are not a critical problem.

Memos also show that Lynas and UGL have pressed a Malaysian contractor, Cradotex, to proceed with the installation of watertight fiberglass liners designed for the containment tanks without fixing the moisture problem and with limited fixes to the walls. But Cradotex has resisted.

“These issues have the potential to cause the plants critical failure in operation,” Peter Wan, the general manager of Cradotex, said in a June 20 memo. “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.”

Mr. Wan said in a telephone interview Tuesday that he believed Lynas and UGL would be able to fix the moisture problem but that he did not know what method the companies might choose to accomplish this.

The fiberglass liners are made by AkzoNobel of Amsterdam, one of the world’s largest chemical companies. AkzoNobel says it, too, worries about the rising moisture.

“We will not certify or even consider the use of our coatings if this problem can’t be fixed,” Tim van der Zanden, AkzoNobel’s top spokesman in Amsterdam, wrote on Monday night in an e-mail reply to questions.

Memos show 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.

An engineer involved in the project said that the blueprints called for the plastic waterproofing but that he was ordered to omit it, to save money. The plastic costs $1.60 a square foot, he said.

Lynas disputes that the design ever called for using the plastic.

Nicholas Curtis, the executive chairman of Lynas, said in a telephone interview from Sydney on Monday that the project here met local environmental standards and that he believed those were consistent with international standards. “I have complete confidence in the Malaysian environmental standards and our ability to meet the requirements,” he said.

Mr. James, the Lynas executive vice president, said in a separate telephone interview from Sydney on Monday that the steel piping used in the plant was carefully engineered and would not pose problems. On the record, he declined to discuss issues with the concrete except to deny that rising moisture was a problem and to say that the tanks had been engineered to meet all safety standards.

In a second interview, on Tuesday, Mr. James said the company had not cut corners. “Lynas is well funded,” he said. “We would never compromise our standards for a cost savings.”

UGL declined to comment, citing a corporate policy of not discussing its customers’ construction projects.

Lynas started the project here three years ago, but had barely begun when it ran short of money during the global financial crisis. The company resumed the project last year after Chinese export restrictions on rare earths prompted banks and multinational users of the materials to offer generous financing.

Malaysia had reason to be cautious in allowing Lynas to build the plant. Its last rare earth refinery, operated by the Japanese company Mitsubishi Chemical, is now one of Asia’s largest radioactive waste cleanup sites. That plant, on the other side of the Malay peninsula, closed in 1992 after years of sometimes violent demonstrations by citizens.

Despite the potential hazards, the Malaysian government was eager for investment by Lynas, even offering a 12-year tax holiday. The project is Australia’s largest investment in Malaysia, intended to produce $1.7 billion a year in rare earths, or nearly 1 percent of Malaysia’s entire economic output. Lynas agreed to pay 0.05 percent of the plant’s revenue each year to the Malaysian Atomic Energy Licensing Board for radiation research.

Protests against the plant started in Malaysia after an article on Lynas’s project was published in The New York Times in early March.

To address public worries about the new plant, the Malaysian government invited a team of experts from the International Atomic Energy Agency in Vienna to visit the site in early June. The team is to submit its report to the Malaysian authorities on Thursday, and the Malaysian government has said it plans to release the report to the public.

Engineers at the project said that Lynas officials had whisked the international inspectors through the factory in a single morning, partly because of security concerns about protesters outside the refinery gates. The team had little chance to examine the refinery’s structure, the engineers said.

Gill Tudor, an agency spokesman, declined to comment on the team’s work because it is not yet public.

Although Lynas has forecast repeatedly in recent months that it will start feeding ore into kilns by the end of September, engineers here said that it would take nine more months to install electrical wiring. They also said that pipe shipments were far behind schedule because of a six-month delay in ordering.

Mr. James insisted on Monday that the project remained on schedule, but he cautioned that Lynas was waiting to see whether the I.A.E.A. panel recommended any changes.

The Malaysian Insider – Design problems, hazardous construction plague Lynas plant, reports NYT

June 30, 2011

KUALA LUMPUR, June 30 — The controversial Lynas rare earths refinery in Kuantan is plagued by environmentally hazardous construction and design problems, the New York Times has reported, citing internal memos and current and former engineers on the project.

The report published today said the issues, including moisture in humid Malaysia, could potentially affect the RM700 million Lynas Corp plant being built to challenge China’s stranglehold in the key rare earths industry.

Malaysia is due to announce today the results of an independent international review of the plant that is scheduled to open this September. The listed Lynas Corp has asked for a halt in its share trading in Australia today pending the report.

Signboard showing the site of the Lynas plant under construction in Gebeng, Kuantan. — File pic
In a report headlined “The Fear of a Toxic Rerun” by Keith Bradsher, the New York Times reported that Lynas officials contend that the refinery being built here is safe and up to industry standards, and say that they are working with its contractors to resolve their concerns.

“All parties are in agreement that it is normal course of business in any construction project for technical construction queries to be raised and then resolved to relevant international standards during the course of project construction,” wrote Matthew James, an executive vice-president of Lynas, in an e-mail last night.

But the construction and design may have serious flaws, the engineers told New York Times, and provided proof through memos, e-mail messages and photos from Lynas and its contractors. The engineers said they felt a professional duty to voice their safety concerns, but insisted on anonymity to avoid the risk of becoming industry outcasts.

“The problems they detail 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,” the paper said.

Lynas is mining rare earths ore deep in the Australian desert and shipping to Malaysia to 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.

The engineers say 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 earths refineries in other countries make heavy use of costlier stainless steel or steel piping with ceramic or rubber liners, the paper said.

“The engineers also say 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.

“Documents show that Lynas and its construction management contractor, UGL Ltd of Australia, have argued with their contractors that the cracks and moisture in the concrete containment walls are not a critical problem,” according to the report.

Memos also show that Lynas and UGL have pressed a Malaysian contractor, Cradotex, to proceed with the installation of watertight fibreglass liners designed for the containment tanks without fixing the moisture problem and with limited fixes to the walls. But Cradotex has resisted, the paper reported.

“These issues have the potential to cause the plants critical failure in operation,” Peter Wan, the general manager of Cradotex, said in a June 20 memo obtained by New York Times.

“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.”

Wan said in a telephone interview with the New York Times on Tuesday that he believed Lynas and UGL would be able to fix the moisture problem but that he did not know what method the companies might choose to accomplish this.

The fibreglass liners are made by AkzoNobel of Amsterdam, one of the world’s largest chemical companies. AkzoNobel says it, too, worries about the rising moisture.

“We will not certify or even consider the use of our coatings if this problem can’t be fixed,” Tim van der Zanden, AkzoNobel’s top spokesman in Amsterdam, wrote on Monday night in an e-mail reply to questions.

Memos show 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.

An engineer involved in the project said that the blueprints called for the plastic waterproofing but that he was ordered to omit it, to save money. The plastic costs US$1.60 (RM4.80) a square foot, he said.

Lynas disputes that the design ever called for using the plastic.

Nicholas Curtis, the executive chairman of Lynas, said in a telephone interview from Sydney on Monday that the project here met local environmental standards and that he believed those were consistent with international standards.

“I have complete confidence in the Malaysian environmental standards and our ability to meet the requirements,” he told the New York Times.

Engineers at the project said that Lynas officials had whisked the international inspectors through the factory in a single morning, partly because of security concerns about protesters outside the refinery gates. The team had little chance to examine the refinery’s structure, the engineers said.

Lynas Executive Chairman Nicholas Curtis and Kuantan MP Fuziah Salleh Open Meeting on 1st July 2011


Dear Members of the Media,

Please find attached:

1) Lynas Executive Chairman reply to my call for an open meeting dated 27th June 2011
Lynas Chairman reply to Kuantan MP call for an open meeting dated 27th June 2011

and

2) My reply to Lynas Executive Chairman dated 29th June 2011
Kuantan MP YB Fuziah Salleh’s reply to Lynas Chairman Nick Curtis 29th June 2011

As you can see from Nick Curtis’s reply, he is not in favour of an open meeting.

Please also note that I stand firm on my call for an open meeting and will not proceed unless the conditions are met. I’m consistent in my call for openness and transparency and I am not afraid to take responsibility towards my constituents for all my words as well for all my actions.

Please do standby on Friday 1st July, 3pm in the case should the CEO of Lynas agree to an open meeting.

Thank You and Regards,

Fuziah Salleh
MP for Kuantan, Malaysia

Video Clip – Ceramah Kuantan MP Fuziah Salleh Tentang Isu Lynas Di Kg.Belukar (26 Jun 2011)

Video dari pahangdaily