27-9-2023 (KUALA LUMPUR) Mr. Ai Chuan Din Chum, a resident of Kampung Pong in the northwestern state of Perak, is well aware that his village sits atop a trove of natural resources that have long piqued the interest of outsiders.
This picturesque Siamese village, nestled in a valley approximately 20 kilometers from the Malaysia-Thai border, is believed to house a wealth of resources, including barite, tin ore, precious metals, and even gold.
“Over the years, many people have come here. There is so much here, even beneath the earth,” shared the 70-year-old resident during a recent conversation.
Kampung Pong, reachable via a winding and hilly tarred road allowing for only single-vehicle passage at most stretches, is the nearest settlement to a pilot project focused on “non-radioactive rare earth element” (NR-REE) mining that commenced operations in Malaysia in March 2022. The mining site is situated about seven kilometers from the village via a dirt road.
The village is home to roughly 200 residents, most of whom are engaged in general labor or informal occupations.
While Mr. Ai Chuan and other villagers are not directly involved in the NR-REE mining endeavor, he revealed that he had previously been hired for reconnaissance missions in the area by foreign entrepreneurs. He wasn’t entirely certain about the specifics of rare earth elements but believed that these interested parties sought to extract certain “chemicals” from the ground.
“They were conducting tests involving these chemicals. I was informed that they intended to use these chemicals to manufacture batteries for mobile phones or electronics,” he explained.
Joining the Rare Earth Elements Bandwagon
Rare earth elements play a pivotal role in everyday consumer electronic devices like laptops, cameras, televisions, and smartphones. Furthermore, they are integral to the development of “green” infrastructure, renewable energy sources, and electric vehicles (EVs).
Notably, China dominates the market for rare earth elements, accounting for approximately 70% of the world’s supply and processing almost 90% of it.
Given the growing significance of rare earth elements, Malaysia is embracing the opportunity to mine these resources and establish a flourishing industry within the country as part of its high-growth, high-value sector initiatives.
Prime Minister Anwar Ibrahim revealed in Parliament on September 11 that the government intends to halt the export of raw materials associated with rare earth elements. This move is designed to safeguard resources, secure maximum returns for the nation, and draft a new National Mineral Policy that focuses on sustainability and responsibility.
The policy is expected to serve as a guiding framework for mining activities in permanent forest reserves, environmentally sensitive areas, and protected regions. It will also facilitate detailed resource mapping and the development of a comprehensive business model to support the entire rare earth value chain within the country.
In this context, “upstream” refers to mining activities, “midstream” entails the extraction of rare earth elements, and “downstream” pertains to industries utilizing these elements to create products like super magnets.
Mr. Anwar estimated that the rare earth industry could contribute RM9.5 billion (US$2.03 billion) to Malaysia’s GDP by 2025, generating 7,000 new job opportunities.
Malaysia’s Minister of Natural Resources, Environment, and Climate Change, Nik Nazmi Nik Ahmad, stated that the country possesses an estimated 16.2 million tonnes of NR-REE deposits, with a potential value of up to US$182 billion. According to him, the development of the rare earth minerals industry offers significant economic prospects.
Perak Project’s Role in Shaping the Industry’s Future
The final set of operating procedures for NR-REE mining in Malaysia hinges on the outcomes of a pilot project located alongside a federal road connecting Baling in Kedah to Gerik in Perak.
During a recent visit to the project site in Kenering, Hulu Perak, construction activities were in progress. Workers were seen painting a building and laying tiles on the roof, although the mining and processing plant’s actual location wasn’t visible.
After a brief encounter with the project’s staff, who declined to allow photos, it was made clear that the news outlet didn’t have permission to take pictures.
The project encompasses an area of 5,339 acres across 11 parcels of land and employs the in-situ leaching (ISL) method to extract lanthanides, a category of rare earth elements used in manufacturing optical devices and alloys, among other applications.
ISL is considered to be less environmentally damaging compared to conventional open-pit mining, which entails extensive site clearance. However, concerns exist regarding the potential impact on groundwater sources.
Mr. Nik Nazmi emphasized that the pilot project would assess the feasibility of rare earth mineral mining and the effectiveness of the SOP in regulating these activities across the country. To date, the data indicates that 5,700 metric tonnes of rare earth carbonate (REC) have been produced, demonstrating that the SOP can effectively govern rare earth mining.
The SOP was evaluated by a committee composed of experts in mining, hydrology, and hydrogeology. It underscores measures to minimize the environmental and societal impacts of mining activities, including the prohibition of radioactive materials production, the use of ISL methods, regular monitoring with the construction of monitoring wells, and the necessity of an environmental impact assessment before greenlighting mining activities.
Perak’s chief minister, Saarani Mohamad, stated that the pilot project confirmed the non-radioactive nature of the rare earth element extracted and found no pollution resulting from the ISL method. The state authorities also reported significant royalty payments from the exports of REC to China.
The timeline for the rare earth element export ban announced by Mr. Anwar in September and its potential applicability to the Perak pilot project remains uncertain.
Challenges from Malaysia’s Past
Environmental groups, including Sahabat Alam Malaysia (SAM), oppose mining, especially in environmentally sensitive regions like permanent forest reserves. SAM President Meenakshi Raman stressed the need for the government to disclose the locations of rare earth element resources and impose a ban on mining activities in such areas.
She pointed to Malaysia’s troubled history with rare earth element extraction, notably the Asian Rare Earth (ARE) plant in Bukit Merah, Ipoh. This plant was associated with elevated cancer rates and fatalities in the community. The ARE plant extracted yttrium, a rare earth element, and left behind thorium waste, a radioactive substance. The plant ceased operations in 1994, with the radioactive waste now stored in a sealed dumpsite near Ipoh.
Additionally, the construction of Lynas’ rare earth processing plant in Kuantan, Pahang, in the 2010s provoked controversy. Lynas, an Australian mining company, is the world’s largest producer of rare earths outside China. The disposal of radioactive waste from the plant generated significant opposition.
While the government initially prohibited Lynas from importing raw materials containing natural radioactive substances into Malaysia, a High Court decision in August allowed the company to pursue a judicial review.
Need for Regulations and Controls
Sia Hok Kiang, Director of Malaco Mining and a geologist with extensive mining experience in Australia, emphasized the importance of responsible mining practices.
He explained that in controlled mining, parameters such as slope moisture content and groundwater sampling must be assessed to prevent environmental issues and ensure safety.
Mr. Sia acknowledged that ISL is a relatively straightforward mining process but emphasized the need for strict oversight and regulation. Controlled mining by reputable companies is preferable to unregulated mining activities that often lead to environmental problems.
Malaysia is viewed as fortunate for discovering rare earth element deposits relatively late in comparison to its improved mining technologies.
Despite these advantages, Meenakshi Meenakshi of SAM remains wary of the environmental and health risks associated with rare earth mining. She argued that the long-term benefits do not outweigh the potential hazards.
Developing Downstream Industries
Mr. Sia highlighted the significance of cultivating downstream industries, especially given the uniqueness of the “heavier” rare earths found in Malaysia. These elements are critical to new technologies, and he advocated for a comprehensive supply chain that would enable Malaysia to process raw materials and add value to the industry.
Dr. Badrulhisham Abdul Aziz of the Center for Sustainability of Mineral and Resources Recovery Technology of Universiti Malaysia Pahang (UMP) emphasized the value of the Lynas plant in the global supply chain for rare earth elements. Japanese companies have been purchasing Lynas-processed rare earths for manufacturing super magnets required in EVs and turbines. He noted that Malaysia possesses the material needed for this downstream industry and that the increasing demand for REEs, especially with the rise of EVs, is likely to create substantial opportunities.
For residents like Mr. Ai Chuan in Kampung Pong, the pilot project poses no immediate concern, but the hope is that it will bring employment opportunities to the locals. If the project were to expand closer to the village, however, questions about its impact would become more pressing.
