KUALA LUMPUR, July 2 — Facebook and Twitter have hobbled Lynas Corp’s RM2.5 billion plan to fire up the world’s biggest rare earth refinery in Malaysia, the Australian miner’s chief executive Nicholas Curtis told Bloomberg, warning Putrajaya foreign businesses were rethinking plans to plant their money here.
In an interview published today, Curtis told the business wire that he had underestimated the power of Facebook and Twitter to rally opposition to the Lynas Advanced Materials Plant (LAMP) here, which has been slapped with further conditions, delaying its operational start-up and which cause it to lose up to A$10 million (RM32 million) a month.
“I’d have dealt with the emerging community debate by the social media a little bit more intensely, a little bit earlier,” Curtis(picture) told Bloomberg, in hindsight.
“We probably didn’t recognise the power of the social media to create an issue.”
Malaysia’s 12.4 million Facebook users form nearly half the country’s 28 million population.
An unprecedented campaign, headed by a local grassroots movement called “Save Malaysia Stop Lynas”, has spread its message on social media platforms, drawing more than 40,000 followers on its Facebook page, Bloomberg reported.
Lynas has faced fierce protests from local residents and opposition politicians who say that the plant will cause radiation pollution despite the company insisting it has met and exceeded local and international safety standards.
The Sydney-based firm, which expects a windfall of RM8 billion a year from the sale of the highly sought-after mineral, says the processed waste can then be safely used as material for road-building.
Bloomberg reported that Lynas shares have plunged 57 per cent in the year through June 29 in Sydney, tracking a 62 per cent fall in New York by Molycorp Inc, the US owner of the largest rare earth deposit outside of China.
“These delays are costing us a significant amount of money and anxiety with our customer base,” Curtis told Bloomberg but declined to name them due to confidentiality reasons.
He told the wire that some potential investors had pulled out from open factories near Lynas’ Kuantan plant and headed to China, which is still the world’s biggest rare earth supplier, controlling 90 per cent of its source.
“The destabilising of our licensing has in fact destabilised their commitment to investing downstream in Malaysia.
“That’s bad for the Malaysian economy in the longer term,” he told Bloomberg.
Malaysia, which is seeking to break out of the middle-income trap and leap into the ranks of high-income economies, is targeting a foreign direct investment (FDI) of RM33 billion this year.
Bank Islam Malaysia’s chief economist Azrul Azwar Ahmad Tajudin told Bloomberg that prospective foreign investors may “rethink their investment plans or existing investors to reassess their positions.”
“They should understand that Lynas is a special case and not an ordinary type of FDI. The project entails serious implications for the environment and people’s lives.”
Prime Minister Datuk Seri Najib Razak has fully backed the project in his home state, in a bid to shore up investor confidence in Malaysia amid a bleak global economic outlook but the continued opposition is proving a sticky issue for his ruling Barisan Nasional administration ahead of key national polls due within a year.