One might believe the above headline contains misleading information, particularly when we here at MetalMiner have long advocated that countries (and companies) that pursue clean energy sources as well as technologies will need to secure new sources of supply for their rare earth metal needs. (As we all know by now, China controls over 97 percent of rare earth metal production.) So when news hit the press over a week ago that the Malaysian government had ordered an environmental review of Lynas’ Advanced Material Plant before it could commence production, the proverbial alarm bells began to ring. Not only did Lynas take a hit in its share price (and Molycorp, conversely, received a bump), but good old – NIMBY (not-in-my-backyard) politics reared its head, putting pressure on the Australian-based miner.
Local residents and activists expressed concern about radiation leakage and according to a story in The Australian, a Mitsubishi refinery closed back in 1992 due to pollution problems. In addition, the nuclear power problem in Japan has exacerbated the issue, even though as the story noted, the technologies used in rare earth processing differ from nuclear technologies.
The case with this Lynas plant in Malaysia centers around a more fundamental environmental concern: are companies locating plants/facilities in different regions of the world to sidestep environmental concerns?
Before we attempt to address that question, remember folks, we can’t have our cake and eat it too. We can’t have a world of “clean energy without some of the “dirty activities that go along with the development of the clean technologies. Specifically, mining is nearly always a dirty process. Consider some of these statistics from a recent Bloomberg piece on China’s rare earth industry pollution issues: China’s rare earth industry each year produces more than five times the amount of waste gas, including deadly fluorine and sulfur dioxide, than the total flared annually by all miners and oil refiners in the U.S. Alongside that 13 billion cubic meters of gas comes 25 million tons of waste water laced with cancer-causing heavy metals such as cadmium, according to the story.
In the case of rare earth metals, thorium, a naturally occurring radioactive element, commonly appears in the ores of other rare earth metals. The processing of the rare earth ores generates this radioactive waste.
At a recent REE conference in China, Daniel McGroarty of Carmot Strategic Group (and also a speaker at our recent International Trade Policy Breaking Point Conference) told MetalMiner the subject of “exporting pollution came up during one of the panels and Cooper Lee of Lynas Corp. offered a spirited defense of his firm’s environmental policies in regard to the Malaysian project.” According to McGroarty, Lee stated that Lynas had implemented the exact same environmental plan in Malaysia as it would for a plant in Australia.
Lynas was unavailable for an interview or any additional comment for this post.