KUALA LUMPUR, July 30 — The federal government will likely drop its requirement for Lynas Corp to repatriate its rare earth processing waste to Australia as a precondition for its licence renewal, according to an official source.
The Straits Times reported the source as saying the Cabinet has discussed the viability of Lynas building a permanent disposal facility (PDF) in the country and will announce its decision next month ahead of the rare-earth firm’s licence expiry.
"Agreeing to the PDF as a condition will mean Lynas has to stump up a US$50 million (RM206 million) security deposit to finance the project.
“It is also dependent on Lynas locating a site and getting the necessary approvals," the source was quoted as saying.
Lynas previously insisted that it cannot manage to export 450,000 tonnes of the water leach purification (WLP) residue, a by-product of their refinery operations, by September and offered to build the PDF as a compromise.
The firm agreed to build the facility last year following the recommendation from the executive review committee appointed by the Energy, Science, Technology, Environment and Climate Change Ministry.
However, Minister Yeo Bee Yin then insisted that Lynas must export its waste back to Australia as a prerequisite for Lynas's licence renewal.
In May, Prime Minister Tun Dr Mahathir Mohamad said Lynas would be allowed to carry on with its operations but Yeo subsequently “clarified” his remarks as meaning the firm must still send its waste back to Australia.
Following approaches by Yeo’s ministry, Australian authorities flatly rejected any possibility of accepting the Lynas waste in their country.
On July 9, Energy, Science, Technology, Environment and Climate Change Deputy Minister Isnaraissah Munirah Majilis told Parliament that they were awaiting further input before deciding on Lynas.
On July 21, some 88 NGOs signed a strong-worded petition urging the government to discontinue the rare earth miner’s licence and criticised the government for appearing to favour the Australian mining firm.
Prior to the 14th general election, the rejection of the Lynas rare earth refinery in Kuantan was among platforms Pakatan Harapan used to garner public support.
This contributed to DAP’s Wong Tack — a strident opponent of Lynas — securing an upset victory over the MCA president at the time, Datuk Seri Liow TIong Lai, in Bentong.
Since then, the coalition has warmed to the idea of rare earth processing in the country, with the Entrepreneur Development Ministry defending the industry as potentially worth RM100 billion and the Water, Land and Natural Resources Ministry identifying other possible locations for rare earth mining and development.