His stand on the Lynas controversy

  • Nation
  • Sunday, 19 May 2019

Lynas and US miner Molycorp Inc have had their production stalled by the challenges of running environmentally safe, complex chemical plants. ON top of that, prices of the products have, meanwhile, slumped after China's export curbs scared manufacturers who need the metals into finding ways to reduce their use.

THE hot potato on Andrew Goledzinowski’s plate is Lynas, of course. Specifically, the controversial Lynas Advance Materials Plant located on the Gebeng Industrial Estate near Kuantan.

The rare-earths processing plant was granted "pioneer" status when it began operating in 2012 and was also offered a 12-year tax exemption by the then Malaysian government.

Things have been rocky since then, to say the least. Some politicians have raised concerns over the environmental risks of having such a processing plant near a major population centre like Kuantan, and a civil society group formed to oppose the plant’s operations.

The group has evolved into the Save Malaysia Stop Lynas movement to further apply pressure against the Australian outfit and increase the public outcry.

Fast forward to 2019 and with a new government in place here, Lynas, which is one of the largest and most modern rare earths separation plants in the world, is facing problems getting licence renewals due to heightened concerns over waste management.

The Pakatan Harapan government set up a review committee which held meetings with the management, scientific experts, community members and opposing groups.

Prime Minister Tun Dr Mahathir Mohamad has said Lynas can continue to operate in Malaysia on condition that the raw material brought into the country is decontaminated first, with the Cabinet setting a September deadline.

But in a blow to Lynas, the Prime Minister also announced that the government was opening up the rare earths mining business to other companies.

With the threat of closure hanging over its facility, Lynas, which employs 645 people (97% of whom are Malaysian) in the Gebeng plant, has already rejected a take-over bid by Australian company Wesfarmers Ltd, a Perth-based diversified industrial conglomerate.

What are your views on the issues surrounding the Lynas plant in Gebeng and its continued existence?

We heard the PM’s statement, but I’m not sure that represents the final decision of the Cabinet. My understanding is that there’s still consideration underway. I could be wrong but we haven’t been advised yet.

Tun Mahathir did say that Lynas was welcome to remain?

Yes, he did say that. And I believe that has also been confirmed by the Cabinet. But in terms of the details of the licensing arrangement, that is still I think (yet) to be advised to us at least.

But September is the deadline for them to remove the wastes?

At the moment, that’s right. There’s a letter written by the AELB (Atomic Energy Licensing Board). Lynas has appealed that letter because they’ve said basically that they cannot comply even if they wanted to.

The term used by Lynas is that the deadline would be unachievable?

That’s right. And so they are hoping that the letter would be withdrawn.

How much time does Lynas need then?

I don’t know. You have to put that to Lynas. But we’re still hoping for a resolution which will accommodate everybody’s needs.

As High Commissioner, I can’t speak for Lynas, but I can speak for us. The two things we always wanted were a fair process and a reasonable outcome. We got the fair process. That process was the executive review committee, there were genuine experts appointed, they heard all sides, they visited the facility and they came up with a very credible report. So, we’re very happy with the process.

Now the outcome is, of course, up to the government, what they do with those recommendations and what conditions they put on Lynas’ future operations.

And we’re hoping that it is reasonable, by which I mean it’s not up to me to dictate what the outcome should be to the Malaysian government, but we want something which allows the operation to continue, will allow the people to remain employed, will allow the government to continue benefiting from all the good things that come from that sort of investment.

Bentong MP Wong Tack came out very strongly, saying you should not be taking sides, that you have no business dictating terms. How do you respond?

I didn’t respond to him publicly but reached out to him privately. I offered to catch up with him over a cuppa to discuss our differences. I’m still waiting for an answer. I’ve never been called a coloniser before! I thought that was interesting.

I mean, you remember what triggered that? The anti-Lynas group was putting out statements saying that the Sungai Kim Kim chemical spill (in Johor) could happen in Pahang because of Lynas without any explanation how the two were connected or without any evidence.

So I basically said, “Look, this is not scientific. This is now just trying to scare people. It was pretty transparent.” And I just did that on my Twitter account. So he was responding to that. I’ve met ministers Redzuan (Yusof) and Yeo (Bee Yin). I’ve spoken to the PM about this. If he (Wong) wants to catch up with me, I’ll be very happy to do that. I respect him and respect his views.

Have you visited the Lynas site?

Yes. I believe in science-based policies and in people being open to seeing things for themselves. I’m sorry that a number of critics have declined to visit the site itself and to talk to the workers.

You know, the interesting thing about Lynas is, unlike some other big industry operations in that area, it’s 97% Malaysian. They are passionate about it. I mean you’ve seen them in protests here in KL. These are not things organised by the management. These are things that people themselves wanted to do because Lynas, as I understand, is the second biggest employer in Pahang, and these people actually want their jobs. So for them it’s like personal. And they are themselves working there and convinced that it is a safe operation.

Did the Australian government make any particular request through you?

Look, there is no request to me about that because this is purely a corporate matter. One company has made an offer and a bid for the shares of another company, and that will be determined by the market. So I’m not involved in that in any way. The Australian government wouldn’t be taking sides. A bid has been rejected anyway by Lynas.

What kind of settlement are you hoping for? You asked for an outcome.

We are hoping for it. I mean, what every business needs is certainty. As you pointed out, until it was withdrawn, this letter which required Lynas to do something they can’t do by the 2nd of September, it has to be withdrawn for Lynas to keep operating.

Will you act for Lynas in this issue of the withdrawal of the letter?

What we see is a market access issue. We would be looking to support any Australian company wanting to do business in Malaysia. Who actually owns the company is a separate matter.

But importantly, if we thought that Lynas is doing the wrong thing, we wouldn’t be putting ourselves in that position. I mean, the decision is Malaysia’s. Malaysian does due diligence on Lynas. It’s done it and found Lynas to be safe. But now what policy response from that is up to the Malaysian government.

But we would always seek to help an Australian company with a market access issue. That’s how we define it.

What is the favourable outcome you are hoping for?

As I said, we would like an outcome which allows Lynas to continue to operate and to continue to employ. I think indirectly it’s about 2,000 Malaysians (employed).

This is a high-tech industry. If you want to make cars, even not flying car, just ordinary cars, you need rare earths. All the devices on that table (pointing to recording devices) include rare earths.

There’s only two places in the world that process rare earths. One of them is Malaysia, and it would be a significant thing for that industry to fail here. So I don’t think anybody is looking for that outcome.

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