ON 15 AUGUST 2019, Malaysia’s Atomic Energy Licensing Board (AELB) released a press statement announcing that they had renewed for 6 months the operating license of rare earths producer Lynas Malaysia. This renewal carries three conditions.

Each time Lynas’ license comes up for, or is renewed, it is a political hot potato. Supporters for and against renewals have protested on the streets to voice their environmental and economic concerns.

And it has become a sticking point as to whether or not the Pakatan Harapan government is keeping its pre-election promises.

To help you better understand the terms and context of this licence renewal, Macaranga dug into the licensing board’s statement as well as previous reports and documents related to Lynas.

(Photo: Lynas Advanced Material Plant, Kuantan, 15 Dec 2018. Credit: Save Malaysia Stop Lynas; Read AELB’s full statement here. Documents cited in this article are listed at the end of the article.)

From the press statement: Susulan daripada kenyataan awam yang telah dibuat oleh YAB Perdana Menteri dan keputusan Jemaah Menteri, Lembaga Perlesenan Tenaga Atom (LPTA) telah membaharui lesen operasi Lynas Malaysia Sdn Bhd (Lynas) selama ENAM bulan.

The AELB (‘LPTA’ in Bahasa Malaysia) exercises control and supervision over the production, application and use of radioactive and nuclear materials. It was established in 1985 as required by the Atomic Energy Licensing Act 1984, or Act 304. The AELB serves to enforce Act 304.

TIMELINE OF AELB LICENCES ISSUED TO LYNAS

• 08/2007 – 09/2013 : Class A licence (Radioactive Material) to build facility; renewed twice
• 09/2012 – 09/2014: Temporary operating licence; Class A; Class E (import radioactive material); Class G (storage of radioactive material)
• 09/2014 – 09/2019: Full operating licence; Class A; Class E; Class G; renewed once in 2016

Lynas was due to see its licences to mill, import and store radioactive materials expire on 2 September 2019. Now that the AELB has renewed the licences by 6 months, Lynas can run its Lynas Advanced Material Plant (LAMP) through to 2 March 2020.

Interestingly, this renewal is valid for 6 months only. In contrast, since 2012, the AELB has always issued to or renewed Lynas’ licences for 2 or 3 years. [Executive Committee Report, Pg 28 – 29]

The AELB attaches three conditions to this licence renewal.

THE FIRST CONDITION

From the press statement: (i) Lynas hendaklah mengemukakan perancangan bagi  pembinaan kemudahan (facility) ‘Cracking  and Leaching’ di luar negara bagi tujuan memindahkan proses tersebut yang kini dijalankan di lojinya di Gebeng Kuantan, keluar dari Malaysia. Kemudahan ‘Cracking and Leaching’ di luar negara hendaklah dibina dan mula beroperasi dalam tempoh 4 tahun dari tarikh sah lesen. Selepas kemudahan ‘Cracking and Leaching’ mula beroperasi di luar negara, pemegang lesen tidak lagi dibenarkan menghasilkan residu radioaktif yang melebihi 1 Becquerel per gram di lojinya di Gebeng, Kuantan. Kemudahan ‘Cracking and Leaching’ di luar negara hendaklah dibina dan mula beroperasi dalam tempoh 4 tahun dari tarikh sah lesen. Selepas kemudahan ‘Cracking and Leaching’ mula beroperasi di luar negara, pemegang lesen tidak lagi dibenarkan menghasilkan residu radioaktif yang melebihi 1 Becquerel per gram di lojinya di Gebeng, Kuantan.

Lynas must move out of Malaysia the cracking and water leaching purification (WLP) processes. These early processes generate the bulk of solid waste (note: Lynas calls them ‘residue’ instead of ‘waste’), including all the radioactive waste.

This condition was absent from previous licence issuance or renewals.

The Lynas facility in Kuantan imports rare earth minerals mined from Mt Weld, Australia. These raw materials contain naturally occurring radioactive elements thorium and uranium.

During cracking, the raw materials are roasted with acids to produce a concentrated acidic solution that dissolves rare earth elements, as well as thorium and uranium. This solution then goes through the WLP process where by-products are filtered out as a solid paste residue.

Radioactivity levels

The WLP residue retains thorium and uranium and has radioactivity levels of about 6 Becquerel per gram. This qualifies the residue as radioactive because the Atomic Energy Licensing (Radioactive Waste Management) Regulations, 2011 (P.U.(A) 274) specifies a material as radioactive if it exceeds 1 Becquerel per gram.

Becquerel is a unit of radioactivity. Radioactivity, or nuclear decay, happens when the nucleus of an atom goes from unstable to stable and emits particles as radiation in the process.

One Becquerel per gram of a material means that in every gram of this material, one nucleus decays every second.

In this AELB condition, Lynas must present plans to build cracking and leaching facility outside of Malaysia. These facilities must also start operations within 4 years of the date of the approved license. It is however, unclear from the statement what date this is.

Why 4 years? No rationale was given. But Lynas had taken up to 6 years to build its facility in Kuantan, judging by the siting and construction licences issued by the AELB between 2007 – 2013. And a few months ago on 24 June 2019, Lynas had reportedly said it was committed to move the cracking and leaching processes to Australia within 5 years.

As part of the latest requirements, the AELB states that once the overseas cracking and leaching facility starts operation, Lynas can no longer generate radioactive waste (> 1 Becquerel per gram) at its Kuantan plant.

THE SECOND CONDITION

From the press statement: (ii) Lynas hendaklah: (a) mengenalpasti tapak spesifik untuk pembinaan Kemudahan Pelupusan Kekal (Permanent Disposal Facility, PDF) dan hendaklah mengemukakan kebenaran secara  bertulis daripada Kerajaan Negeri bagi penggunaan tapak tersebut sebagai PDF. Pemegang lesen juga hendaklah  mengemukakan pelan perancangan  pembinaan PDF yang lengkap serta pelan pembiayaan yang mencukupi bagi menampung keseluruhan pembinaan dan operasi PDF; Atau (b)  mengemukakan kebenaran   rasmi secara bertulis daripada pihak berkuasa mana-mana negara untuk membawa keluar residu Water Leach Purification(WLP) ke negara tersebut;

This second condition gives Lynas a choice in disposing of its WLP residue. Lynas has accumulated about 580,000 tonnes of WLP residue on site, according to the AELB statement.

One choice is that Lynas export its residue but it must present official written authorisation from the receiving country or countries.

It is the other option that we are examining because Lynas has responded in news reports that it is choosing this option. This option is that Lynas identifies specific site(s) to build a Permanent Disposal Facility (PDF) and present written approval from the state government of the site(s).

Back in 2011, before the AELB issued the first temporary operating licence to Lynas, it had invited the International Atomic Energy Agency to review Lynas’ application.

The Agency recommended that Lynas submit, before it started operations, a plan that lays out its approach to long term waste management, especially the waste from the cracking and leaching processes. [IAEA 2011, Pg 21]

Timeline of Independent Evaluations of Lynas

• 05/2011: International Atomic Energy Agency (invited by AELB)
• 05/2012: Parliamentary Select Committee (Cabinet)
• 01/2013: Oeko-Institute, Germany (requested by Save Malaysia Stop Lynas!)
• 10/2014 : International Atomic Energy Agency (invited by AELB)
• 11/2018: Executive Committee for the Evaluation of LAMP Operations (appointed by MESTECC)

Following the Agency’s evaluation, Lynas revised its waste management plan. On 30 December 2011, Lynas submitted its Radioactive Waste Management Plan to AELB in order to apply for a Class A temporary operating licence.

In the document, Lynas wrote that its residue management actions were, in order of priority, to minimise residue, reuse or recycle materials, and lastly dispose it as waste. [Pg 46]

Lynas also wrote that if it fails to reuse or recycle and commercialise the radioactive residue, it would store the residue onsite and later dispose of it at a PDF. [Pg 56]

Pertaining to the PDF, Lynas wrote in the radioactive waste management plan that:

• It intends to apply measures at the PDF to minimise human exposure to contamination; these measure will last up to 300 years. [Pg 80]

• A PDF would cost USD$25 million to build and maintain; it would establish a $50 million fund to pay building, decommissioning, and decontaminating a PDF. [Pg 56]

• This $50 million will be invested into Malaysian government bonds, and would be “held by a bank or law firm as escrow agent.” [Pg 57]

Of this $50 million security deposit, the Executive Committee Report (2018) reported that Lynas has paid:

• in 2013, $6.05 million cash
• in 2014: $5 million cash
• in 2015, 2016, 2017 respectively: $7.79 million in bonds

Lynas is scheduled to pay $7.79 million each year in 2019 and 2020.

This latest AELB condition states that Lynas must present complete plans for building the PDF and for financing all the construction and operations of the PDF.

Yet this condition has been imposed by AELB since 2012 when Lynas applied for a temporary operating licence. The licence approval then required Lynas to, within 10 months, present plans and sites for building a PDF regardless of the outcome of efforts to recycle or reuse radioactive residue.

Notably, Lynas did present documents laying out plans and the location(s) of a PDF to the AELB in March 2013. These documents were approved by the AELB in February 2014. However, these documents related to residue management and were not an application to build a PDF. [Executive Committee Report, Pg 33]

Since 2014, Lynas appears to have stopped working towards a PDF. The company focused on recycling or reusing its residue. Finally, in Dec 2018, the Executive Committee again suggested that Lynas immediately identify a site for a PDF and build it. [Pg 92]

THE THIRD CONDITION

From the press statement: (iii) Lynas hendaklah menamatkan semua aktiviti penyelidikan dan pembangunan (Research and Development, R&D) berkaitan penggunaan semula residu radioaktif WLP sebagai Condisoil dalam bidang pertanian dan hendaklah mengemukakan 0.5 peratus (%) daripada jualan kasar setiap tahun yang ditetapkan untuk usaha R&D sebelum ini kepada Kerajaan Malaysia  sebagai cagaran tambahan sehingga  kemudahan ‘Cracking  and Leaching’ di luar negara mula beroperasi.

This third condition states that Lynas must stop all research and development related to Condisoil—a soil conditioner formulation for agriculture that contains 10% WLP residue.

Lynas has been developing Condisoil as a way to reuse or recycle its radioactive WLP residue. They reasoned that by diluting WLP residue in Condisoil, the product would have radioactivity levels below 1 Becquerel per gram, and thus qualifies as non-radioactive. [Executive Committee Report 2018, Pg 21]

To that end, since 2015, Lynas has been sponsoring various Malaysian institutes to study the use of Condisoil for oil palm, kenaf, paddy, maize and also as a backfill material to refill excavated holes [Pg 83 – 87]. These studies reported favorable results.

Building on these results, Lynas had applied to the Department of Environment for approval to conduct large-scale studies, which are needed to qualify for commercialization.

The Department of Environment however rejected Lynas’ application, in part because the Department found higher levels of heavy metals in plants after use of Condisoil. [Pg 87]

Really independent?

In 2018 when the Executive Committee reviewed the feasibility of Condisoil, they expressed concern over the Department of Environment’s findings. They also questioned if studies sponsored by Lynas were long enough or independent.

Particularly for the last point, the Executive Committee had recommended that if research on Condisoil continues, it should do so under the purview of an independent entity to ensure the integrity of studies. [Pg 89]

Now, this latest AELB condition also states that Lynas must transfer 0.5% of gross revenue every year to the Malaysian government as additional security deposit until its overseas cracking and leaching facilities are operating.

This sum has always been allocated for research and development of residue management. This was one of the conditions set by the Ministry of International Trade and Industry when it approved Lynas’ application in 2007. [Executive Committee Report, Pg 14]

How much would this sum be? Based on figures in Lynas annual reports, these 0.5% allocations would have been AUD$1.87 million and $1.28 million in 2018 and 2017, respectively.

References:

1. Atomic Energy Licensing Act 1984, or Act 304
2. Atomic Energy Licensing (Radioactive Waste Management) Regulations, 2011 (P.U.(A) 274)
3. Executive Committee Report 2018, MESTECC
4. IAEA 2011 Report of the International Review Mission on the Radiation Safety Aspects of a Proposed Rare Earths Processing Facility (the Lynas Project), IAEA
5. IAEA 2014 Report of the International Post-Review Mission on the Radiation Safety Aspects of the Operation of a Rare Earth Processing Facility and Assessment of the Implementation of the 2011 Mission Recommendations, IAEA
6. Radioactive Waste Management Plan 2011, Lynas (no online link)

Macaranga‘s YH Law had written about this issue for Science Magazine. Read it here: Radioactive waste standoff could slash high tech’s supply of rare earths, Science Magazine, April 1, 2019.