Report puts to rest all doubts and confusion

PETALING JAYA: Lynas' decision to operate in Malaysia and not Australia is based on economic and commercial considerations - not because of less rigid rules and regulations in this country as has been claimed, according to the Parliamentary Select Committee on the plant.

The PSC in its report said that it was not economical for the company to operate in Australia due to higher infrastructure and utility costs, adding that claims by certain groups that Australia practised higher standards than Malaysia were not substantiated.

The committee said authorities in Western Australia had explained that there was no legal or administrative requirement to place factories such as Lynas beyond a 30km radius of residential areas.

"There is also no requirement for waste or residue produced by industries such as Lynas to be returned to the original mine," it added.

The PSC also said that an accredited Australian laboratory would analyse the contents of the Lynas plant's raw material lanthanide concentrate before it was exported to Malaysia to be processed. Representatives from the Science, Technology and Innovation Ministry visited the enforcement agency in Western Australia between May 23 and 25 to verify documents and permits by Lynas Malaysia Sdn Bhd as well as obtain official clarification on certain issues raised, the report said.

The report said Lynas was given the approval to operate in China but decided against it due to the export quota limit.

It said Lynas chose the Gebeng industrial area in Kuantan because of its strategic location and proximity to the Kuantan port, availability of skilled petrochemical workers, sufficient supply of chemical materials, water and gas and good infrastructure.

The PSC also said there was no truth to claims that the value of property around Gebeng has plummeted because of the plant.

It said the market report of the Valuation and Property Services Department for last year showed that the value of property around Kuantan had increased over the last five years.

The PSC agreed that Lynas Malaysia Sdn Bhd should be given a 100% income tax exemption, but for 12 years rather than the 15 years.