Malaysia extends bauxite mining ban until July to fight pollution

Published by MAC on 2016-04-10
Source: Mining.com

Malaysia extends bauxite mining ban until July to fight pollution

Cecilia Jamasmie

Mining.com

9 April 2016

Malaysia is extending its ban on bauxite mining by another three months, effective April 15, in order to clear stockpiles and curb air and water pollution caused by the sector in the past two years, the environment minister said on Friday.

The country emerged last year as a major provider of bauxite after leading producer Indonesia banned ore exports to encourage more processing at home. "Existing bauxite stockpiles in Kuantan must be exported before the moratorium can be lifted, the government said." From January to November, Malaysia shipped some 20 million metric tons of bauxite to China, the world’s biggest aluminum producer. That was nearly half China’s total bauxite imports and a sharp increase from 3.25 million tons in the same period in 2014.

But the activity took its toll on the environment and the public quickly turned against the country’s largely unregulated bauxite mining industry, accusing it of turning the waters and seas red near Kuantan, the capital of Malaysia's third-largest state.

As a result, the country’s natural resources and environment ministry imposed a three-month ban early this year and froze new permits for the export of bauxite. While the ban will now last until July, the issuing of export permits will resume as soon as existing stockpiles disappear, minister Wan Junaidi Tuanku Jaafar, according to Reuters.

Malaysian bauxite exports to China are cheaper than those from rivals such as Australia and India, but considered to be of poorer quality. Some of the larger Malaysian miners have recently acquired better quality equipment in response, to reduce pollution and to dig out higher-quality bauxite.

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Malaysia extends bauxite mining ban by another three months

Reuters - http://www.cnbc.com/2016/04/08/reuters-america-update-1-malaysia-extends-bauxite-mining-ban-by-another-three-months.html

8 April 2016

* Will resume issuing bauxite export permits to clear stockpiles
* Impact of extended bauxite ban limited -trader

KUALA LUMPURx(Reuters) - Malaysia will extend its ban on bauxite mining by another three months, effective April 15, in order to clear stockpiles and remove the risk of the aluminium-making ingredient contaminating the country's rivers, the environment minister said on Friday.

While lower output at the world's top exporter of bauxite threatens to interrupt supply to the world's biggest aluminium producer, China, traders expect the impact to be limited given China's ample stocks of the raw material.

Malaysia's largely unregulated bauxite mining industry has boomed in the past two years to meet demand from China, filling in a supply gap after Indonesia banned exports, but the frenetic pace of digging has led to a public outcry with many complaining of water contamination and destruction of the environment.

Late last year, bauxite mining was blamed for turning the waters and seas red near Kuantan, the capital of Malaysia's third-largest state and key bauxite producer Pahang, following which, in January, the government imposed its first three-month ban on mining the commodity.

"The cabinet today agreed to the ministry's suggestion that the bauxite moratorium in Kuantan be extended by three more months," said Wan Junaidi Tuanku Jaafar, Malaysia's natural resources and environment minister at a press conference.

"One reason for the moratorium extension is to clear the stockpile, only then can we clean the stockpile areas. This is so that we remove the possibility of remnants of the bauxite stockpile contaminating the river and sea in the event of rain."

Existing bauxite stockpiles in Kuantan must be exported before the moratorium can be lifted, Wan Junaidi said, adding that there were 3.6 million tonnes of stocks in Kuantan.

Malaysia had shipped out around 3.5 million tonnes of the commodity to China in December, but exports dwindled to slightly under 1 million tonnes in February.

Malaysia will resume issuing bauxite export permits to help miners clear existing stockpiles, Wan Junaidi said. It had frozen export permits during the first moratorium.

If producers are unable to clear up stockpiles within three months, it is up to them to apply for additional extension, the minister added.

A Singapore-based alumina trader said he expected the impact of the extended ban to be limited due to China's ample stocks as well as low metal prices on the London Metal Exchange (LME) that have curbed production.

Aluminium prices sank 18 percent last year on a China-driven supply overhang and have not made any gains so far in 2016.

China may hold more than 20 million tonnes of imported bauxite stocks, said Xu Hongping, an analyst at China Merchants Futures. "Their stocks could support five months of production."

"China has also started importing bauxite from Guinea, which should replace the bulk of demand from Malaysia," Xu said.

(Additional reporting by Melanie Burton in Melbourne and Polly Yam in Hong Kong; Reporting by Joseph Sipalan, writing by Emily Chow; Editing by Himani Sarkar)