Malaysia may suspend bauxite mining

Published by MAC on 2016-01-03
Source: Reuters, BBC

Malaysia may suspend bauxite mining

Reuters

2 January 2016

KUALA LUMPUR — Malaysia is pushing to suspend bauxite mining due to concerns about its impact on the environment, a cabinet source said on Saturday, threatening to interrupt supplies of the aluminium-making material to China.

The largely unregulated industry has grown rapidly in the last two years to meet Chinese demand. Bauxite mining was blamed for turning the waters red on a stretch of coastline and surrounding rivers in eastern peninsula Malaysia after two days of heavy rain earlier this week.

The cabinet wants to temporarily halt bauxite mining until regulations, licensing and environmental protection can be put in place, the source told Reuters on Saturday.

"The idea is to suspend it for a time until all this is sorted out, but ultimately the prerogative for licensing lies with the state," the source told Reuters on condition of anonymity.

Prime Minister Najib Razak has asked the resource minister to resolve the issues with the government of Malaysia's third-largest state and key bauxite producer Pahang, the source said.

Waters and seas near Pahang's state capital Kuantan ran red earlier this week as downpours brought an increase in run-off from the ochre-red earth at the mines and the stockpiles, stoking environmental concerns.

The state official in charge of the environment Mohd Soffi Abd Razak, however, said the pollution was caused by illegal mine operators and not by mines run by companies approved by the state government, according to local media reports.

"We believe the illegal miners are causing the waters to be murky," the Malay Mail newspaper quoted the official as saying.

Bauxite mines have sprung up in Malaysia since late 2014, notably in Kuantan, which faces the South China Sea. The mines have been shipping increasing amounts of the raw material to China, filling in a gap after Indonesia banned bauxite exports in early 2014, forcing the world's top aluminium producer, China, to seek supplies elsewhere

In the first 11 months of 2015, Malaysia exported 20 million tonnes of bauxite to China, up nearly 700% from the previous year. In 2013, it shipped just 162,000 tonnes.

But the frantic pace of mining in Kuantan has brought in its wake a growing clamour of voices complaining of contamination of water sources and the destruction of the environment.

Natural Resources and Environment Minister Wan Junaidi Tuanku Jaafar said earlier that the central government had had come up with many new regulations and guidelines for the industry, but needed the consent of the state government to impose them.

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Malaysia to Ban Bauxite Mining for 3 Months to Cut Pollution

Anuradha Raghu & Ranjeetha Pakiam

Bloomberg

6 January 2016

Malaysia, the biggest shipper of bauxite to China, will stop mining ore for three months to cut river and sea pollution, Natural Resources and Environment Minister Wan Junaidi Jaafar said.

The ban takes effect from Jan. 15 in Pahang, the largest producing state, Wan Junaidi told reporters. Exports will be allowed during the moratorium to reduce port inventories, and after the suspension the government will limit bauxite production to the capacity to ship the material, he said on Wednesday.

Malaysia supplied more than 40 percent of China’s imports of the aluminum-making raw material last year after Indonesia imposed a ban on shipments in January 2014. China produces about half the world’s aluminum used in everything from aircraft to door frames and drink cans. The country’s exports of the metal and its products surged 36 percent in November from the previous month, helping push global prices down 19 percent in 2015.

The ban would have to last longer than six months before it starts to hurt China, said Paul Adkins, managing director of consultancy AZ China Ltd. “I doubt there will be much of a price spike reaction. The market is acutely aware that Chinese smelters appear to be slowing down, and with so much material in stockpile, there will be no interest by Chinese buyers to pay more.”

Water Resources

Red dust from trucks carrying ore to Kuantan port had blanketed roads, trees and plants, threatening air purity and water resources, said Fuziah Salleh, member of parliament for Kuantan, capital of Pahang. The government should suspend exports until proper laws are in place to ensure mining is sustainable and to curb illegal operations, she said Tuesday.

“Things are just out of control at the moment,” Fuziah said. “I’m very concerned that the damage may be irreversible.”

All the inventories at Kuantan port have to be exported or moved to a central area equipped with proper drainage, washing bays and filtration, Wan Junaidi, the minister, said in Kuala Lumpur. The government will extend the moratorium if industry fails to take the necessary steps within three months, he said. The central stockpile will only be accessible to legal miners, preventing illicit operations, he said.

Malaysia supplied 21 million metric tons of China’s imports of 49 million tons in the first 11 months of 2015, according to Chinese customs. While the government is allowing shipments under existing permits, it has stopped issuing new export licenses, the ministry said. After the three-month mining ban, the provision of new permits will be limited to port capacity, it said.

The north-eastern state of Terengganu already froze new bauxite mining applications in September, citing environmental concerns.

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Bauxite in Malaysia: The environmental cost of mining

http://www.bbc.co.uk/news/world-asia-35340528

19 January 2016

Bauxite mining has become a controversial political issue in Malaysia. As the government implements a temporary ban on extracting the aluminium ore, BBC South-East Asia correspondent Jonathan Head visits the most-affected area.

Amid the monotonous dark green lines of Malaysia's endless palm oil plantations, there are now vivid red gashes in the hills behind the east coast town of Kuantan.

These have appeared only in the past 18 months, as a frenzy of open-cast bauxite mining gripped Pahang province.

Tonnes of bauxite are being transported out of the region. It is the world's main source of aluminium so is vital for the construction of everything from airplanes to saucepans and cooking foil.

The numbers are staggering.

Annual output of bauxite ore has increased from a little over 200,000 tonnes in 2013, to nearly 20 million tonnes last year. Malaysia is now the world's top producer, accounting for nearly half of the supply to China's massive aluminium industry.

Malaysia has a long history of mining, especially tin, but until very recently it scarcely registered on global markets as a source of bauxite. That changed suddenly in January 2014, when, in an attempt to boost its own aluminium-smelting industry, Indonesia banned exports of bauxite ore.

Up to that point Indonesia had been China's major supplier.

Several Indonesian mining companies then started looking at the hills above Kuantan, where the plentiful bauxite was of a lower quality than that available in Indonesia and Australia.

'Mad rush'

Much of the land in Pahang province has been redistributed to settlers so they could cultivate it with rubber, palm oil or fruit orchards. So all the companies had to do was approach smallholders whose properties contained bauxite, and offer them substantial sums of money to allow their land to be mined.

Most of the plots were quite small, allowing the companies to exploit a loophole in Malaysian law, which only requires an environmental impact assessment for plots larger than 250 hectares.

The little country roads winding through the hills were suddenly clogged with huge lorries carrying the ore to the port in Kuantan. The rivers ran red with bauxite sediment, staining the sea as they flowed out. Some of the mines had licences; many did not.

"It became a whole mad rush," says the opposition member of parliament for Kuantan, Fuziah Salleh. "There were 44 companies with export licences, and they were all rushing to get as much as they could get from anybody who was willing to sell their raw ore.

"The greed, the need, of certain people, outweighed welfare of the common people and the authorities allowed it. And I think there is a lesson to be learned."

The lesson has perhaps been learned. The federal government has ordered a halt to all mining while it rethinks the regulation of the industry. Seven people have been detained on suspicion of corruption. But the damage to the environment and future health risks remain unknown, and worrying.
How badly has bauxite polluted the water?

I watched a team from the Malaysia Nature Society (MNS) taking samples from the Sagu River, at the point where water is pumped out for Kuantan's domestic supply.

They collected bottles of water and trays of alluvial mud, and analysed them to detect the presence of heavy metals, arsenic and mercury, which typically exist in bauxite sediment.

Government officials are already doing similar tests, but the failure to regulate the bauxite industry has damaged public trust in its efforts; the MNS volunteers said they wanted to do the tests themselves to ascertain how badly polluted the water supply is.

Marine scientists have also warned of possible catastrophic damage to the ecosystem off the coast of Pahang.
Image caption Volunteers test water pollution near mines, instead of trusting government readings

The official who ultimately bears responsibility for what has happened in Pahang is the state's Chief Minister Adnan Yaacob. A veteran politician from the ruling UMNO party, he has been in the job for 16 years, and under Malaysia's federal system chief ministers wield a lot of power.

He turned down the BBC's request for an interview. But he has since acknowledged that the state government failed to control bauxite mining, and that he had not sought central government help because he believed he could handle the situation locally.

Demanding compensation

Che Long bin Che Ali is one of the residents in the bauxite zone who refused to lease out his land, where he cultivates fruit trees. He worries about the impact on the health of future generations.

But his house is right next to one of the roads used by the ore lorries; everything inside and outside his home was covered by a thick film of red dust, and the trees started to die.

He began stopping the lorries and demanding compensation payments from them.

He took me to what had been a durian orchard a few hundred metres down the road. The home of the orchard-owner now lies abandoned and propped up on a high slab of red-brown earth.

All around, the excavators have dug out a desolate moonscape of earth piles and gaping holes.
Image caption Che Long bin Che Ali on the site of what used to be a durian orchard but that has now been dug apart by excavators

"This has not helped us," he told me.

"I am not angry with the bauxite industry. I know it brings income for the government, but it must follow proper regulations. Don't pollute our roads, don't pollute the rivers.

"A handful of people enjoy the profits, but in future many people could suffer."

As the three-month moratorium took hold, fleets of lorries were left idle in jungle clearings, next to stockpiles of ore that have not yet been exported.

Once the moratorium expires, it is not clear what will happen. Many residents want mining to be banned permanently. The state is thought to have only 10 years of bauxite reserves left.

Perhaps just a few hundred settlers got rich from the bauxite boom, and a few dozen well-connected companies. The state collected a 5% royalty on exports, but opposition politicians argue the federal government could have imposed a 10% duty, but did not do so.

Whatever the benefits were, they do not appear to justify the enormous environmental damage that has been done.