Malaysia to ban bauxite mining in Pahang for 3 months

AP News
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Posted: Jan 06, 2016 3:52 AM

KUALA LUMPUR, Malaysia (AP) — Malaysia's government said Wednesday it will ban the mining of bauxite in central Pahang state for three months from Jan. 15 to regulate the industry after its unfettered growth last year caused sea and air pollution.

Bauxite mining began in central Pahang state in 2013 but production surged from mid-2014 amid strong demand from China after Indonesia banned bauxite exports and India raised ore tariffs. Bauxite is an aluminium ore and the world's main source of aluminium.

The mining sparked a public furor after it was blamed for contaminating the sea and some rivers in Pahang's capital of Kuantan, turning the waters red again last month after heavy rains. The water pollution first occurred in May last year. The transportation of the red earth by dozens of lorries also kicked up dust and caused unhealthy air, officials said.

"From Jan. 15, everything will come to a standstill," Natural Resources Minister Wan Junaidi Jaafar told a news conference. Under a three-month moratorium, he said bauxite mining in Pahang will be halted and the focus will be on clearing 12 large stockpiles of red earth containing the ore and to build proper washing and storage facilities.

Exports will continue as part of effort to clear the stockpiles but the government will freeze new export permits during the period, he said. A central storage area will be built with proper facilities, and monthly production will be capped based on Kuantan port's capacity of about 2.2 million metric tons, he said.

Malaysia is the main supplier of bauxite to China with exports last year hitting more than 20 million tons, up sharply from just under a million tons in 2014, local media reported.

Pahang Chief Minister Adnan Yaakob said there are 22 licensed bauxite miners in the state. He said regulating the industry will strengthen it and make it more sustainable.

"When the supply is low, prices will go up. This is a blessing in disguise for the players," Adnan said.

He said the state's royalty income from bauxite mining surged to 46.7 million ringgit ($10.7 million) last year, up from only 2.4 million ringgit ($548,000) in 2014.