— Ryan Albrey
The Malaysian Insider
Mar 30, 2012
MARCH 30 — I do not need to write a ‘for dummies’ guide for Malaysians. They have made up their minds about Lynas and are now quite knowledgeable about the issues. They have learned more about rare earth and radioactive thorium than many of us will ever learn in a lifetime and they want Lynas out of their country.
Instead, I write this for Australians for whom media coverage of this story has been sparse. It is difficult to work out why the media have paid scant attention to this story. I would have thought that this was a story made for journalists.
This story involves our relationship with Malaysia. Considering that Malaysia is one of our closest neighbours and a country whose cooperation we vigorously strive for, I would have thought that an issue like Lynas should be big news in Australia.
Sure, this might not be a diplomatic row between political leaders. Our prime minister is not calling theirs ‘recalcitrant’ and theirs is not threatening trade sanctions.
And of course, this story does not involve asylum seekers.
No, this is different!
While our respective prime ministers get along nicely and make funny deals like swapping refugees, a whole country, 28 million Malaysians, are starting to feel anger towards Australia.
In this modern age, bilateral relationships between two prime ministers are not nearly as important as the relationship between a body of 23 million people and another body of 28 million.
Australians are becoming quietly hated by Malaysians and nobody thought to tell Australians of this?
This story also involves the crucial ingredients to some of the most important high tech inventions that we have come to rely on in the 21st century. If Lynas fail to get their product to markets, the price of iPhones, iPads, hybrid cars and wind turbines will increase across the globe.
This story involves a three-way trade battle between Australia, Malaysia and China.
Most importantly, this story may involve a change of government in Malaysia — for the first time in 50 years.
Dear Australians,
Let me tell you about a company called Lynas.
Lynas is a mining company based out of Sydney. Their main mining tenement is at Mt. Weld, Western Australia, just 30km north of Laverton.
Their business model consists of digging these rare earth ores from the ground at Mt. Weld, processing them up a bit at Laverton and then trucking them to Fremantle before shipping them off to Kuantan on the east coast of the Malaysian peninsular. In Kuantan, they will further process their rare earth ore into rare earth oxides. Then they will make billions selling these oxides to buyers in America, Japan, France and China.
Your view of Lynas largely swings on your view of why Lynas made the decision to process these minerals in Malaysia rather than Australia.
It’s about the money!
It is cheaper for Lynas to operate in Malaysia than in Australia. Lynas knows that they will make more money for their shareholders if they operate in Malaysia rather than in Australia. Furthermore, Malaysia has a particular comparative advantage.
The disagreement between Lynas and those that oppose them stems from the source of this comparative advantage.
Lynas states that they built their Lynas Advanced Materials Plant (LAMP) in Kuantan because of the availability of cheap skilled and unskilled labour, chemicals and fresh water. This may all be true, but it seems fanciful to me that this would be the main motivating factor for putting this plant in Malaysia rather than in Australia.
To understand why Malaysia is such an attractive destination for Lynas, one has to understand some important differences between Australia and Malaysia — beyond the difference in the cost of inputs.
The United Malays National Organisation (Umno), the ruling party in Malaysia has ruled for over 50 years. Nominally democratic, elections in Malaysia are ugly affairs, routinely tarnished by allegations of vote rigging, voter intimidation and strict control of the media by the Government among many other issues.
This is where Malaysia’s actual comparative advantage lies in heavy industries such as the processing of rare earth.
Without question the processing of rare earth pollutes. Massive quantities of super heated sulphuric acid are required to separate the rare earth elements from the rubbish elements they are found with under the ground.
In California, rare earth miner Molycorp was shut down in the late 1990’s after it was found out by government regulators that tons of radioactive tailings spilled out into the California desert many times over a number of years.
In the northern region of China, rare earth processing has done untold damage to the livelihood of farmers and local residents. Much of the truth of what has happened in China will probably never be told.
In Malaysia itself, Japanese company Mitsubishi processed rare earth in the 1980’s and early 1990’s. Their shoddy operation is believed by public health experts to have done untold damage to a whole generation of Malaysian children in the area, some born with shocking birth defects and others contracting childhood leukaemia at five times the national average.
It is hard to think of an industry in more desperate need of democratic oversight. The rare earth industry needs to be monitored by bodies that source their authority from the very people that stand to lose the most if things go wrong.
The Malaysian Government does not represent the people of Malaysia. They represent the vested interests of big business. They represent the one per cent of Malaysians that can afford to flee the country should it ever become necessary.
The problem is that democratic oversight is expensive.
If Lynas were to conduct their operations in Australia, or any other country with a strong democratic tradition, they would be required to negotiate with the local communities. They would be required to present an argument to the voters that their presence brings benefits that outweigh the inherent, undeniable risks in processing rare earth. They would be required by largely incorruptible public servants to adhere to stringent public health and safety regulations that reduce the risks to the public, down to the lowest level possible.
This is not the case in Malaysia
The Malaysian public did not even find out about Lynas operations in Pahang until the construction of LAMP was almost finished. They read about it in the New York Times.
Access to official documentation surrounding the licensing scheme is a big farce.
Whistle-blower engineers working on the project tell of appalling breaches of basic standards in the construction while Umno politicians seek to sow discord in the community claiming that Malaysians opposed to the Lynas plant are seeking to assist the rare earth industry in China.
These materials will eventually come to market. Somewhere in the world, these materials will be processed and then turned into iPhones, hybrid cars and wind turbines. This environmental activist accepts that as inevitable.
However it should not happen in Malaysia where the institutions are not mature enough to deal with opportunists like Lynas Corporation. More than skilled labour, fresh water or sulphuric acid, it is democratic oversight that makes doing business more expensive in Australia for Lynas. This is where Malaysia has its comparative advantage.
However, the decision by the Malaysian Government to go ahead in the processing of dangerous chemicals is one that its voters will one day seek to disown.
That day may come sooner rather than later
Lynas have now been granted a temporary operating license and the likelihood now that Umno politicians will do anything to prevent Lynas from operating seems remote.
All eyes now are on the general election due no later than April 2013. If the results of those elections are much the same as the last 50 years, Lynas will go ahead in Pahang. However it is by no means a sure thing. At the 2008 general election, Pakatan Rakyat, led by the enigmatic Anwar Ibrahim, made unprecedented progress toward establishing a genuine two-coalition democracy.
Certainly the opposition has made great headway on the back of the Lynas issue. A nationwide rally held months ago brought tens of thousands of people out onto the streets in protest. In a country where streets protests are typically met with riot police eagerly wielding batons and tear gas, the numbers present at those protests indicate significant public discontent at the way in which the Malaysian Government have handled this Lynas matter.
Will Putrajaya (the administrative capital) fall to the opposition?
It is certainly possible.
Since an Australian mining company may have a hand in this, perhaps it is time that the Australian media started to look at this story more closely. — New Mandala
///If Lynas fail to get their product to markets, the price of iPhones, iPads, hybrid cars and wind turbines will increase across the globe.///
If given choice, I would rather stick to a simple lifestyle without all these modern conveniences instead of having my lifespan shortened due to radioactive pollution/contamination.
Do not depend on Australian papers to support problems involving an Australian company.
Although clearly Asians…they behave like Europeans.
They treat Asian immigrants well because they need them badly for lowly jobs…that their own Aussies do not want.
They are lazy and choosy for jobs.
Go to pubs…you will see all drinking beer..not working.
Asians are getting rich because they work much harder than ‘convicts”..with English blood.
HA, HA – love d articlet: HIT d NAIL on d HEAD!
“Malaysia’s actual comparative advantage:
The Malaysian Government does not represent the people of Malaysia. They represent the vested interests of big business. They represent the one per cent of Malaysians that can afford to flee the country should it ever become necessary.”
Ryan certainly knows abt d DNA n corrupt culture of UmnoB/BN!!
Bottomline: Rakyat simply CANNOT TRUST d corrupt UmnoB/BN gomen n various SYSTEMS here 2 uphold their rights
What’s your reaction 2 dis news?
D Sessions Court here today cleared former STI Ministry sec-general Ab dul Ha nan A lang En dut of 10 bribery charges without requiring his defence
A harbinger of MORE GREAT ESCAPES n Oscars, play play lor
Someone very high up in umno has already had his kopi (alright, just my guess ok?). And so there is no way umno will ever stop lynas. Given that umno’s special expertise is bribery and the lack of enforcement, it is quite obvious that the one real advantage the lynas plant would bring to all of us is this: Soon all of us will glow in the dark. Now that is something, aint it? People living nearer the plant and dumpsites may actually enjoy some electricity saving.
/Australians are becoming quietly hated by Malaysians and nobody thought to tell Australians of this?/-Ryan
Nobody meh? See for yourself! Nah this:
http://www.youtube.com/watch?v=rLn3BLWw9B8
for dummies in Australia but for soon-toos in Malaysia
If rakyat DON’T manage 2 STOP UmnoB/BN fr giving d green light 2 Lynas Corp 2 set up its plant in Pahang, rakyat then deserve 2 SUFFER later fr d wastes of Lynas
B d real BOSSES, SACK n FIRE UmnoB/BN! ABU abu ABU: Tell UmnoB, YOU ARE FIRED
“These materials will eventually come to market. Somewhere in the world, these materials will be processed and then turned into iPhones, hybrid cars and wind turbines. This environmental activist accepts that as inevitable.
However it should not happen in Malaysia ” – end of quote
It should not happen anywhere else in the world, including China or even Australia.
It seems that the motor car industry which is the largest user of products manufactured from rare earth, is paring down the use of such products in their vehicles and finding ways to manufacture their cars without their use whatsoever.
Hopefully, the time will come that products using elements made from rare earth will be greatly reduced or substituted completely by new methods of manufacturing them.
So that nobody needs to have such industries in the own backyard.
Ryan Albrey is right about Malaysia’s ‘comparative advantage’ in our general lack of democratic oversight which is likely one of the important factors that Lynas sought to establish LAMP in Gebeng. (Ouch one glancing blow at either BN govt/authorities or general conditions here!) Another is the comment that “Australians are becoming quietly hated by Malaysians” – which is implying that at least those of us who oppose its refinery project in Gebeng do not have the rationality to distinguish between Australians from Lynas, an Australian Corporation listed on ASX with substantial shareholders like Japan’s Mitsubishi UFJ Financial group, US’s Morgan Staley Investment Management Inc and of course the driving force Chairman Nichlas Curtis. This is not even a project pushed or defended by Julia Gillard govt! His comments on GE –eg. “will Putrajaya (the administrative capital) fall to the opposition?” – are to the point –“If the results of those elections are much the same as the last 50 years, Lynas will go ahead in Pahang”, he added. (This must be taken to mean not just retaining Federal power but Pahang because land matters are constitutionally a state matter and a PR Pahang state govt may revoke TOL?) Meanwhile Ah JibGor will not force issue but just keep engaged until 13th GE and outcome trying to make sure that the Lynas protest will not do electoral damage to BN electoral chances.
the World Economic Forum’s global competitiveness report placed Malaysia 14th among 142 countries — second in ASEAN — in terms of quality of education, The Star reported.
We should be No 1, not No 14, based on the millions of straight As students from SPM, PMR and upsr
http://www.themalaysianinsider.com/malaysia/article/muhyiddin-our-schools-are-better-than-the-us-britain-and-germany
The other direct insult to Malaysian govt but which many would consider true is Ryan’s other statement – “the Malaysian Government does not represent the people of Malaysia. They represent the vested interests of big business. They represent the one per cent of Malaysians that can afford to flee the country should it ever become necessary….” What must be disconcerting to Lynas is the writer’s other statement “However, the decision by the Malaysian Government to go ahead (which it will do so if BN wins both Parliamentary and Pahang state majority) in the processing of dangerous chemicals is one that its voters will one day seek to disown”. I wonder how will Lynas conduct LAMP’s operation in peace in the longer run in the face of intermittent protests by locals against it if it were bulldozed through. Lynas has to convince locals/detractors that LAMP’s operations will not pose an insidious clear and present danger to public health.
The prospects of Lynas being able to convince are not bright. Lynas can only fall back on expert opinion from independent international agency like IAEA’s opinion. But there is now a healthy skepticism against mere appeal to expert opinion as being authoritative. Partly because if one wants to look for support, one can also find contrary/competing expert opinion that says it’s not safe (eg like that of European Committee on Radiation Risk). Mostly it’s because people understand from human experience that profit motive will camouflage all inconvenient truths. And what is scientific truth today can be proven fallacy tomorrow. Well the Royal Society president Lord Kelvin, 1897-99 did say that according to expert scientific opinion then prevailing, ”X-rays are clearly a hoax…and aeroplane is scientifically impossible” which in hindsight was fallacious! (Earlier they said earth was centre of universe). However what is constant will be nagging doubt about human selfishness and hypocrisy. Doubting Toms will always ask “how come Lynas is not shipping its gold and other minerals to Malaysia for processing for job creation? Why process rare earth here if the continent of Australia has many places for it to do so there? What is sauce for the goose should be sauce for the gander. As far as Malaysian authorities, well there is a general trust deficit that they would place public interests ahead of private gains/agenda.
“The Malaysian Government does not represent the people of Malaysia. They represent the vested interests of big business. They represent the one per cent of Malaysians that can afford to flee the country should it ever become necessary.”
Dis is like openly pouring stinking COW dung on UmnoB/BN, n also insulting M’sia
Dis makes ahCHEATkor, UmonB/BN NO FACE (bo bin) lah! Hilang n jatuh maruah, man
Where’s d response fr ahCHEATkor? Got hood or no aah 2 SUE Ryan?
Of cos, if TRUE, how 2 sue leh?
LOL, d fat 1 who cried wee wee wee 2 a press conference claiming (falsely) dat he was assaulted or molested now just wants 2 move on fr d incidence on March 25
Can get an Oscar what n a few pats fr his bosses: Well done, fatso boy, now go fetch
LOL, d fat 1 who cried we e we e we e 2 a press conference claiming (falsely) dat he was harmed now just wants 2 move on fr d incidence on March 25
Can get an Oscar what n a few pats fr his bosses: Well done, fatso boy, now go fetch
LOL, d fat 1 who cried wee wee wee 2 a press conference claiming (falsely) dat he was harmed now just wants 2 move on fr d incidence on March 25
Can get an Oscar what n a few pats fr his bosses: Well done, fatso boy, now go fetch
Viagra Chua’s April Fool joke–compulsory for all Chinese students in SMJK to take Chinese language paper as an examination subject.
Not enough Mandarin teachers for primary schools and yet he wants it to be compulsory in secondary schools
http://thestar.com.my/news/story.asp?file=/2012/4/1/nation/11025763&sec=nation
Chua with his abandoned party should instead keep his mouth zipped and stock up more viagra for his favourite pastime(ar..ar..kind of thing.You know what i mean?).Too much s*x rendezvous has already made his brain not functioning properly,hence only all the bullshit coming out from his mouth.Represent chinese hah,true or not?? Chua,i will tell you pordah!
Did ahCHEATkor n PekMoh send congratulatory messages 2 MP Wong HoLeng’s parents who r celebrating their diamond wedding annivrsy in Sibu? 1M’sia, man!