PROCESSED rare earth exports from a Malaysian plant owned by Australia's Lynas Corp could hit RM8 billion a year from 2013 based on current prices, a top company official said yesterday, as buyers chase supplies outside China.
The forecast is a more than ninefold increase from earlier projections of RM880 million in 2009 and would be the equivalent of about 1 per cent of Malaysia's gross domestic product, Lynas executive vice-president of Strategy and Corporate Communication Matthew James said.
The Lynas Advanced Materials Plant in Malaysia's central state of Pahang is slated to begin production in September 2011, making it a key global supplier, after top rare earths producer China last year imposed export quotas to retain resources.
"Lynas is a key part of that supply response," James said in a telephone interview from Sydney yesterday.
"Malaysia will become the go-to destination for value-added exports. Companies requiring rare earths would eventually locate on the east coast of Malaysia. Lynas is acting as a seed for future investments," he added.
By 2013, annual rare earth production from the Malaysian plant would hit 22,000 tonnes, meeting roughly a third of total demand outside China, James said.
"Today the market is about 120,00 tonnes to 130,000 tonnes. By 2013, that will probably grow to 150,000 tonnes globally," James said. "Most of that growth, or most of that demand, is inside China, but outside China markets, by the that time, it will be about 70,000 tonnes," he added.
Rare earths are crucial to production of high tech goods from fibreoptic cables to smartphones and electric cars. Prices stand at US$120,000 a tonne (RM364,800).
Big buyers such as Japan, the US and the Europe rely on these minerals and have been looking to cut their reliance on China that accounts for around 95 per cent of global output.
Lynas' Malaysia plant will process rare earth concentrate shipped in from the firm's Mount Weld site in Western Australia. The site is scheduled to produce its first feed of ore in the week of March 31.
That strategy has prompted green and social NGOs to warn Malaysia could become a dumping ground for radioactive by-products from the refining process, creating health and environmental risks.
"We have gone beyond the Malaysian regulations. The plant is being designed with health and environment perspectives in mind," James said.
Lynas will install waste water and gas treatment systems, government and company data shows. Malaysia's Department of Environment (DOE) approved the Lynas project in 2008.
"The DOE will continue to come and check if the plant has been built according to those specification. After inter-agency discussions, the pre-operational licence is supposed to grant after that point," he said.
"Between now and September this year, we are looking to receive that pre-operational licence," he said. - Reuters
