Malaysia’s Rare Earth Goal

Mining firm Lynas has high hopes for its rare earth plant in Malaysia. But will environmental worries scupper them?

Malaysia’s Rare Earth Goal
Credit: Steven Milne

This month, operations were supposed to begin at a rare earth processing facility in Malaysia’s Kuantan – a fast-growing port city situated along the South China Sea. The project, awarded to the Australian-based Lynas Corporation, was originally envisaged as a lofty attempt to break China’s virtual monopoly of the production of rare earth metals.

However, expectations quickly grew further after it was reported that the Kuantan plant, upon completion, would become the largest rare earth mining centre in the world. Malaysia, offering business-friendly tax incentives and large swaths of purchasable land, seemed to be an ideal place to base the project. But the commencement of the plant is now uncertain because of a grassroots campaign spearheaded by the local population of Kuantan over the ecological and environmental consequences of the project. The campaign has only compounded doubts that had already surfaced after concerns were raised by engineers during construction about the structural integrity of the plant.

Rare earth metals are an essential component of many high-tech items. As The Wall Street Journal noted in July:

‘The 17 elements are favoured for a host of niche applications because of their unusual characteristics. Magnets made with the rare earth minerals neodymium and praseodymium are uniquely strong, making them valuable components in wind turbines and computer hard drives. Rare-earth phosphors such as europium and yttrium are in demand to tweak the colour of compact fluorescent light bulbs and LED displays.’

However, the toxicity of the by-products of rare earth mining has rendered the practice a casus belli for environmental activists, protesters, and locals in Kuantan, who are on the frontlines of this conflict. One of the by-products in the process of refining rare earth materials from monazite sands is thorium (thorium-232), a radioactive chemical element that can be used in the production of nuclear energy.

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The flipside of the debate is that rare earth metals are similarly essential in the production of new, green technologies. Everything from hybrid cars, to wind turbines, to smart light bulbs are manufactured using rare earth metals. But do the amount of radioactive waste and the dangerous levels of pollution that the processing of rare earth materials emits outweigh the industrial and technological benefits? This is the question the actors in this drama are now belatedly being forced to confront.

‘Save Malaysia – Stop Lynas’ – an organization at the forefront of the effort to prevent the opening of the plant – has been utilizing blogs and social media to spread its message. And the group has secured some coverage in the Malaysian press and blogosphere; they were even able to secure a meeting with Lynas CEO Nick Curtis, the details of which haven’t been released. Such grassroots, indigenous pressure on globalized companies has had moderate success in the past, including the Cochabamba protests in Bolivia against water giant Bechtel in the early 2000s.

Ninety-percent of the world’s rare earth mining is done is China, where environmental regulation is virtually non-existent. Beijing’s position in the supply of rare earth metals has given it dominance akin to OPEC’s position in the oil market, dominance it has also been able to use as diplomatic leverage. And, because China controls a substantial majority of global supply, it can unilaterally affect prices by cutting export quotas and raising taxes on importers. It will be interesting to see now, though, whether much smaller, weaker and poorer actors – in this case farmers in Kuantan – will be able to affect real change and prevent Lynas from setting up shop.

Conventional wisdom suggests that corporations, eyeing huge profits and bringing with them much needed foreign direct investment, usually end up on the winning side. But the Malaysian government will need to consider whether, if the land is irreversibly degraded, the water unfit for human or livestock consumption and when the crops can no longer grow, it will have been worth it.

Tim LaRocco is a graduate student of international relations at The City College of New York. He has travelled throughout the developing world, including stints as a volunteer worker in the Public Parks Department in Chiang Mai, Thailand, and as a researcher for the South African Human Rights Commission in Cape Town. He currently lives in Long Island, New York.