Malaysia court rebuffs challenge to rare earths plant

AFP News13 April 2012

A Malaysian court has dismissed a bid to stop a rare earths plant run by Australian miner Lynas from going online over fears it will harm the environment by producing radioactive pollution.

The Kuala Lumpur High Court on Thursday declined to hear a challenge against the plant, which is due to start production soon in eastern Pahang state.

Lynas intends to process rare earths -- elements used in such products as smart phones, wind turbines and missiles -- imported from Australia.

But Lynas' plans have proved a stumbling point for Prime Minister Najib Razak's government ahead of elections expected to be held soon as thousands have protested against the facility.

The government will next week review its decision in February to approve a temporary operating license for the plant, but activists and opposition leaders had hoped for the courts to step in.

Siding with the Malaysian government and Lynas lawyers, the court ruled the application by 10 Pahang residents to halt the plant was premature with the government review still pending.

K. Shanmuga, a lawyer for the residents, said Friday his clients were "very disappointed" as they had wanted the court to order further studies on the project's safety.

"They are extremely worried about their health, their safety, their children's safety. They are worried about pollution to their rivers and their food," he told AFP.

Lynas has said the facility -- the Lynas Advanced Material Plant (LAMP) -- is safe and the target of a "baseless scare campaign".

The Malaysian government said in February it would allow the plant to start operating under close supervision.

Opponents plan to protest anew against the plant on April 28 in the capital Kuala Lumpur in conjunction with a simultaneous rally for electoral reforms.

Lynas initially planned to start production last year, processing an initial 11,000 tonnes of rare earths annually, which analysts say will help break a Chinese stranglehold on the materials.

China currently meets about 95 percent of world demand, but its moves to assert control over production have crimped world supply and sent prices soaring in recent years.