This article first appeared in The Edge Financial Daily on December 14, 2018

KUALA LUMPUR: Energy, Technology, Science, Climate Change and Environment Minister Yeo Bee Yin has called on the 130 employees of Lynas Malaysia Sdn Bhd, who had protested outside parliament on Tuesday, to “put things into perspective” and consider the risks of rare earth residue accumulation in the country against the cost of sending it back to Australia.

In a Facebook posting yesterday, Yeo urged the employees to look at the numbers being churned out by analysts who covered Lynas Corp Ltd. The Australian exchange-listed company owns Lynas Malaysia, which operates the Lynas Advanced Materials Plant (LAMP) in Gebeng, Pahang.

“I really hope you can put things into perspective according to these figures — it only takes 10% of Lynas’ earnings of one year to send out waste that has been accumulated in Malaysia for six years,” Yeo wrote.

She quoted a report by CLSA analyst Dylan Kelly who in a client note put the cost of transporting the waste back to Australia at an estimated A$60 million (RM181.3 million), but with insurance covering about A$46 million of that.

“The balance of about A$14 million would represent about 10 % of the earnings before interest, taxes, depreciation and amortisation of A$129 million that Lynas recorded in 2017-18,” Yeo observed, noting brokers including UBS and CLSA have kept their ‘buy’ recommendations on Lynas stock despite her ministry’s requirements that Lynas remove the water-leached purification residue (WLP) waste from Malaysia.

“UBS even set A$3.10 price target on the stock, which is nearly double the current share price.”

She accused Lynas’ management of trying to stage a drama and to paint her ministry in a bad light in order to avoid honouring a commitment it made in 2012, and to protect its bottom line.

For clarity, Lynas and Lynas Malaysia had each presented letters of undertaking in 2012, indicating their commitments to remove such residue from Malaysia, if necessary.

“Considering the risk of the residue accumulation, it is now necessary to do that. Therefore, it is my hope that Lynas will honour their words and start the process of shipping out WLP residues from Malaysia.”

In their protest, the 130 employees had urged the government to save their jobs at the rare earth plant.

Currently at the United Nations Climate Change Conference of the Parties in Katowice, Poland, Yeo said she understood the workers’ anxiety about possibly losing their jobs.

“Trust me, I understand your anxiety of losing jobs. I grew up in an estate where my mother was a clerk and I know full well how it feels like of struggling to make ends meet — food, shelter, education, clothes, for the family.”

She reiterated that Lynas had twice made a commitment to remove its waste from Malaysia, and stressed that the risks to the surrounding communities and environment increases with the increasing amount of accumulated residue as it is exposed to the threat of natural disasters such as major flooding.

The two new pre-conditions for future licences and permission renewals for Lynas Malaysia are for the export of WLP residue before Sept 2, 2019 and the submission of an action plan on the disposal of Neutralisation Underflow Residue, for which Lynas has approval to store until Feb 15, 2019.