Malaysia bans bauxite mining amid ecological fears

Ecologists fear for the health of the Pahang coast. Source: Wikipedia

Bauxite mining is becoming increasingly controversial in Malaysia as the government has temporarily banned the extraction of aluminium ore.

In Kuantan, Pahang province, in Peninsular Malaysia, the past 18 months has seen a sudden increase in open-cast bauxite mining.

Tonnes of bauxite are being transported out of the region which is the world’s main source of aluminium, used in aeroplanes, saucepans, cooking foil and numerous other products.

Annual output of bauxite ore has increased from 200,000 tonnes in 2013 to nearly 20 million tonnes last year.

The federation is now the world’s top producer, supplying nearly half of China’s massive aluminium industry.

Until recently Malaysia hardly registered on global markets as a source of bauxite but that totally changed in January 2014 when, in an attempt to stimulate its own aluminium-smelting industry, Indonesia banned bauxite ore exports.

Until then Indonesia had been China’s main supplier.

Several Indonesian mining companies turned to Kuantan, where plentiful bauxite was available at a lower quality than that in Indonesia and Australia.

The companies approached smallholders and offered them substantial sums to mine their land.

Most of the plots were small, allowing the mining firms under Malaysian law to dodge the need to carry out an environmental impact assessment for plots larger than 250 hectares.

Roads were clogged with heavy lorries carrying bauxite to the port at Kuantan and rivers flowed red with bauxite sediment, staining the sea at the coast as they flowed out.

“It became a whole mad rush,” opposition MP Fuziah Salleh said. “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.”

Now the federal government has ordered a halt to all mining while it tries to regulate the industry. Seven people have been arrested on suspicion of corruption.

Tests are being carried out for arsenic and mercury which typically exist in bauxite sediment.

Marine scientists are also warning of potential damage to the ecosystem off Pahang’s coast.

The state’s Chief Minister Adnan Yaacob, a veteran politician from the UMNO coalition, has been in the job for 16 years and wields considerable power under Malaysia’s federal system.

He has acknowledged that the state government failed to control bauxite mining and that he had tried to regulate the industry without Kuala Lumpur’s interference.

Che Long bin Che Ali, who leased out his land to a mining company, lives on a road used by the ore lorries and everything in his home is covered in a thick film of red dust and his fruit trees are dying.

As part of the global economic shake-up, Malaysia’s state oil firm Petronas is planning to cut up to 50 billion ringgit (US$11.4 billion) in capital and operating expenditure over the next four years, according to an internal memo from its chief executive officer.

The plan comes as oil prices fall worldwide, with the price of Brent crude tumbling to US$28 a barrel last Friday.

Petronas is Malaysia’s biggest source of revenue, covering as much as one third of the government’s annual budget. Malaysian Prime Minister Najib Razak, whose current budget was based on a US$48 price for Brent crude, will table amendments next week to the budget.

Malaysia is Southeast Asia’s second-biggest oil and natural-gas producer and the world’s second-largest liquefied natural gas exporter. Petronas, Malaysia’s only Fortune 500 company, did not detail in its memo the projects that would be affected.