By Lim Guan Eng, Chief Minister of Penang
Malaysia should celebrate World Environment Day by putting people and not profits first by closing down Lynas rare earth plant instead of issuing a TOL or POL and scrapping the proposed two nuclear-power generating plants. Malaysian regulatory authority Atomic Energy Licensing Board (AELB) and the Ministry of Science, Technology and Innovation (MOSTI) should explain whether they are approving the application by Lynas for the Permanent Operating License following Lynas financial crisis and non-compliance with the conditions stated in the Temporary Operating License(TOL).
Last month, Lynas Corp. planned to defer some debt repayments and sell as much as A$40 million in shares after its share prices slumped. Lynas had spent about A$1 billion ($930 million) on a rare earths processing plant in Kuantan. The TOL (Temporary Operating License) for two years is due to expire on the 2nd September 2014.
Under the terms of the issuance, as recommended by the International Atomic Energy Agency (IAEA) report, Lynas is required to submit the plan for the PDF (Permanent Deposit Facility) for its radioactive waste before TOL is granted. Lynas failed to submit the plan before the issuance of the TOL but AELB relaxed the provision by granting them instead 10 months after it commenced operations to comply.
On the eve of the 10 months dateline, Lynas submitted a ‘conceptual’ plan of the PDF while the Deputy Minister of MOSTI, Dato Abu Bakar Mohd Diah replied in the Parliament that Lynas did identify the site and the plan for the PDF but he declined to reveal the site. This showed clearly that Lynas failed to comply with the requirements stated in the TOL.
The risks of Lynas being insolvent are real as Lynas has only a closing cash balance of AUD$23.4 million as at 31 March 2014. For the next quarter, Lynas will require at least AUD$ 48.172 million to be able to continue operating as a business. In desperation for additional cash, Lynas is seeking to raise AUD$30 million through rights issue and another AUD$10 million through institutional placement to boost its working capital.
The BN government should be reminded of their horrifying mistake of allowing the Japanese Asian Rare Earth(ARE) plant to operate in Bukit Merah. After it was shut down, the former ARE owner is spending USD100 million in clean-up operations of the radioactive wastes. In view of the possible closure of Lynas, which is 10 times the size of ARE, the radioactive waste left behind will be a huge environmental and financial burden for future generations, especially if Lynas collapses financially.
Worse the BN federal government is pressing ahead with building two nuclear-powered generating plants even though Malaysia has a healthy power reserve margin of more than 30%. A people-centric government that is accountable and transparent would never allow these projects that put profits of its cronies over people’s health without considering the long-term environmental costs.
