This article first appeared in The Edge Financial Daily, on January 8, 2016.

KUANTAN: The Malaysian Anti-Corruption Commission (MACC) is investigating a shortfall in the amount of royalty received by the Pahang state government for bauxite mining, investigations director Datuk Azam Baki said.

Royalty amounted to RM47 million last year, when it should have been five times higher, he said.

“The poor collection could have been contributed by corrupt practices as well as mismanagement in handling the royalty.

“We are investigating,” said Azam in a press conference held at MACC Pahang headquarters yesterday.

Pahang Menteri Besar Datuk Seri Adnan Yaakob said on Wednesday the state government had earned RM46.7 million in royalty from bauxite mining activities last year, compared with RM2.4 million in 2014.

“We cannot reveal how the calculations were made but our investigations showed that it should be more,” Azam said yesterday.

He added that the anti-graft body’s probe into royalty collection began two-and-a-half months ago.

“We will not hesitate to launch investigations against government officials if need be. We are aware of what is happening. This involves public interest,” Azam said. 

On Wednesday, Pahang and Putrajaya announced a three-month freeze on all bauxite mining in the state from Jan 15.

The suspension is to give time to address pollution caused by the mining, which, besides polluting the air, has also turned rivers and the seafront at Kuantan red.

Natural Resources and Environment Minister Datuk Dr Wan Junaidi Tuanku Jaafar said the moratorium would be extended indefinitely if the industry fails to contain the pollution problem within three months.

Wan Junaidi said he expects all bauxite stockpiles to be cleared and moved to an integrated stockpile centre within the three months, while new terms and conditions will be imposed for approved permits (APs).

The government will not be issuing new APs within the moratorium period unless the companies have existing contracts in the industry, he added.

He said companies that refuse to clear their stockpiles within the moratorium period will have their APs withdrawn.

Since the mining of bauxite in Kuantan was ramped up for export to China last year, residents in the area have complained about pollution caused by red dust from the mining activities and spillage from lorries transporting bauxite to the Kuantan port.

It was reported that in the first 11 months of 2015, Malaysia exported more than 20 million tonnes of bauxite to China, up nearly 700% from the previous year. In 2013, it only shipped around 162,000 tonnes. — The Malaysian Insider