‘New economic powerhouse’ for Malaysia


  • Business
  • Saturday, 07 Dec 2019

Water, Land and Natural Resources Minister Dr Xavier Jayakumar took time off his busy schedule to tackle questions about the mining industry that StarBizWeek had posed to him.

This came after Xavier told Parliament in July that he is pushing for Malaysia to exploit the RM732bil treasure trove of minerals.

You said that Malaysia has a treasure trove of more than RM700bil in minerals that are worth exploiting. Can you please elaborate on this?

Malaysia is blessed with various types of mineral resources and rocks that makes the mining and quarrying sector a potentially significant contributor to the national economy. The development of these resources would directly contribute to the federal and state governments in terms of royalty.

There are more than 20 types of minerals being developed in Malaysia and we can categorise them into three major groups namely metallic minerals, non-metallic minerals and energy minerals.

For metallic minerals we have for example tin, aluminium, copper, gold and iron that can generate around RM178bil.

Non-metallic or some may call industrial minerals, comprise silica, kaolin, quartz rock, limestone, mica and many others.

These minerals are estimated to be worth RM435bil. As for energy minerals, we have coal reserves in Sabah and Sarawak with values estimated at RM119bil.

We thus have the resources in the form of minerals worth more than RM700bil. Certainly, we have to give time in order for the industry to grow.

The mining industry in the country is currently in the upstream sector. We have to also develop the downstream as well.

Do you think that the mining of minerals can be a “new economic powerhouse” for Malaysia?

I am very positive that the mining and mineral-related industries have a good potential to become the next source of economy to our country. Mining and quarrying only contributed about RM9.644bil or 0.7% to our gross domestic product (GDP) in 2018. We visited a rare earth company in China which had an annual turnover of RM3bil. If our local companies start small, they can easily achieve an annual turnover of RM1bil in revenue. This will also contribute substantially towards the coffers of the government when the companies pay taxes.

When I say that mining could be a new economic powerhouse of the country, it does not mean that it is going to be the new biggest industry in the country. But, it will be a new source of income for the country. It might be part of the future growth of Malaysia, but not the main engine of growth.

Mining these minerals though poses environmental risks. How are you looking to address that? For that matter, what was your experience with uplifting the bauxite mining ban with SOPs in place?

The mining industry in general is seen as destroying the environment and poses health effects to living beings. In order to develop our mining industry, we have to be more pragmatic and assert more control so that the industry can grow without damaging the environment and the wellbeing of the people.

This is what we call sustainable mining where we strike a balance between economic purposes, the environment and people. I lifted the bauxite ban seven months ago. Our experience in handling bauxite mining in Pahang has taught us a great deal.

Industry players must adhere to the SOP and they can self-check whether they are able to comply or not before the mining lease is given to them.

Our SOP for mining bauxite is already done as we are very concerned about the environment.

I don’t think we have to worry about environmental pollution on a long-term basis if we have very strict SOPs and we enforce these regulations on the ground for industry players.

There is a view that minerals are a depleting resource and once gone, can never be gotten back. Should we not be looking at exploring greater productivity say in agriculture and more efficient use of resources in manufacturing?

We have mineral deposits for the next 150 years. We have a huge amount of deposits for marble granite that can last us for the next 100 years as well. Once it is depleted, we can import the minerals. Besides that, we are boosting agriculture productivity as well. But, we cannot concentrate on agriculture alone. Malaysia’s land space is not as big as other countries in order to have a large-scale agriculture industry. Our agriculture industry is limited. Certainly, we will be more focused on food security rather than the export market.

You got to play smart and see where the country’s niche is and tackle that for it be good for the country.

Mining is the primary industry that enables other industries to grow. For example, the metallic minerals that we have contribute to the development of metallurgical industries such as steel and iron beams. These products then become the inputs for the construction industry. We understand that the resources are finite, but we also impose sustainable consumption and production of resources.

The mining of minerals needs hefty investments, who will fund this?

Investments will be from local companies. Foreign investors are also interested to come in and joint venture with local companies. Venture capitalists may come in as well because it is high capital expenditure. There are a lot of investors who are ready to invest. They are now knocking on our doors.

There is also the case of restructuring the industry from the upstream, midstream and downstream sectors. Of course, small entrepreneurs are not capable of coming up with big investments. The industry should look into strategic partnerships between the players to combine capital and source technologies from overseas.

You need companies with the experience in mining with big pockets in order to undertake investment. The return is over a long period of time and the investments are hefty.

I would prefer big players to come in to ensure the investors are going to invest over a long period of time. I am not in favour of some who do things in a short-cut manner and wanting to make it big in a very short period of time.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3

Xavier Jayakumar

   

Did you find this article insightful?

Yes
No

Across the site