Perak cancels rare earth MoU

April 29, 2011

File photo of a skip loader at work at the site of a rare earth metal mine in Nancheng county, China. Reuters picIPOH, April 29 Bowing to public pressure, the Perak government has rescinded its Memorandum of Understanding with Hong Kongs CVM Minerals Limited with immediate effect.The Perak State Development Corporation (PSDC), the states investment arm, made the announcement in a short email statement to the media tonight.On the MoU between PSDC and CVM Minerals Ltd for the proposed rare earth project, it is to be informed that both parties have cancelled and ended the MoU with immediate effect as the state government has decided not to issue any permit, licence or land approval for any rare earth project in Perak, PSDC chief executive officer Datuk Samsudin Hashim said in the statement.The decision comes amid cries of outrage from opposition lawmakers over the states plan for such a project, even as controversy continues to rage over a similar effort in Gebeng, Kuantan.Perak Pakatan Rakyat (PR) lawmakers threatened this morning to hold a street protest against the proposed project if the state refused to rescind the agreement.The leaders said they would mobilise the town folk of Bukit Merah and Perak citizens in a massive protest to demand a stop to the project.It was reported on Wednesday that the Perak government had entered into an agreement with CVM Minerals allowing it to explore and mine for rare earth in Bukit Merah.In a filing to the Hong Kong Stock Exchange on April 18, CVM Minerals announced it had entered into the MoU with the PSDC to carry out the project in Bukit Merah.According to state PR representatives, the announcement had triggered shock among Bukit Merah folk, many of whom are still sore over the deaths that followed the countrys first rare earth plant.Bukit Merah was the site of Malaysias last rare earth plant 20 years ago, which is still undergoing! a massi ve RM300 million clean-up. The Japanese-owned Mitsubishi Chemicals Asian Rare Earth (ARE) plant has been linked to eight cases of leukaemia, seven resulting in death.Speaking to The Malaysian Insider shortly after the news hit the headlines, Perak Mentri Besar Datuk Seri Dr Zambry Abd Kadir denied any knowledge of such an MoU and expressed disapproval that his consent had not been sought.He also said that any rare earth project in the state would be subject to the same standards required by the federal government that recently put Gebengs Lynas Corp plant on ice after public outcry over potential radiation pollution.The PSDC immediately clarified yesterday that its MoU with CVM Minerals was merely to allow the firm to conduct feasibility studies on the viability of mining for rare earths in the area.Samsudin said in a statement that the MoU had a six-month deadline and would be automatically cancelled should the companys intention fail to receive approval from any local authority or if the project is not viable.He also admitted that the matter was still being studied and the state government had not issued any approval for the project.As such, the issue of environmental pollution does not arise at this point. Both parties are aware of this and will prevent any involvement of such pollution arising from activities that could cause these effects, he said.Samsudin had also pledged that the PSDC would seek input from all quarters over development plans for the states minerals industry, particularly covering the aspect of environmental concerns, the potential of the minerals mined and changes in technology.At this stage, PSDC is not bound by any financial or environmental risks seeing as we are only at the stage where the project is being studied, he said.