Mines and Petroleum Minister of Western Australia Norman Moore said he could understand that Lynas Corporation Ltd had its own reasons for having its rare earth processing plant in Malaysia as Australia itself was a high-cost country in terms of manufacturing and downstream processing.

Although a lot of mining activities are being carried out in Australia, most of its minerals are exported, with very little processing done in the country, he told reporters at his office in Perth, Western Australia, recently.

Lynas is currently building a RM700 million rare earth processing plant in Gebeng, Kuantan, which will use raw materials from Mount Weld, Western Australia, to produce rare earth products.

As much as Moore would like to see the processing done in Australia, he said his government had to respect the fact that Lynas had chosen Malaysia for commercial reasons.

“The company make their own judgment to suit their circumstances, financially and economically. We understand they are developing a mine here (West Australia) to provide employment and make West Australia a part of the market for rare earth that we are keen to be part of.

“However, the company has decided for economic reasons that processing should take place in Malaysia and that is a good thing for Malaysia,” he added.

Currently, China is reportedly the biggest producer of rare earth, with Japan as one of its biggest market as rare earth is a crucial element in the making of high-tech electronics products.

Meanwhile, Mount Weld has the richest deposits of rare earth outside China, and Western Australia too had a whole range of other minerals, including huge deposits of iron ore, nickel, tin, lead, copper and also gold.

Moore, however, said there had been very little processing within Australia although there were minerals.

“We would like to see that change but Australia is a high-cost country in terms of manufacturing and downstream processing and so we would find it very hard to compete, for example, with China in terms of making steel with our iron ore and so we exported them to other countries,” he added.

Meanwhile, Lynas executive chairman Nicholas Curtis has been reported to have said that Malaysia was a good place to invest and that Gebeng had the necessary infrastructure for heavy industries.

“As we are in a global business, we chose Malaysia because the infrastructure is better developed and the regulations are very clear,” he had said.

- Bernama