A Hong Kong company and the Perak government have agreed to explore and mine for rare earths in the state, even as controversy is raging over the Lynas refinery in Pahang.
In a filing to the Hong Kong Stock Exchange dated April 18, CVM Minerals Limited — linked to Ho Wah Genting Berhad — announced it had entered into a memorandum of understanding (MoU) with the Perak State Development Corporation (PSDC) to carry out the project in Bukit Merah, Ipoh.
The Hong Kong company, through its local subsidiary CVM Metal Recycle Sdn Bhd, has applied to the state’s land and mineral office for a licence to explore the area, covering 250 hectares, for rare earths.
Bukit Merah was also the site of Malaysia’s last rare earths plant 20 years ago, which is still undergoing a massive RM300 million clean-up.
Environmentalists have raised questions over radioactive waste being produced and stored at Lynas’s Gebeng plant, fearing a repeat of the Japanese-owned Mitsubishi Chemical’s Asian Rare Earth (ARE) plant, which has been linked to eight cases of leukaemia, seven resulting in death.
The Australian miner’s shares dropped eight per cent to AU$2.25, as of 3.49 pm in Sydney, on the first day of trading since the Malaysian government announced a review of its plant in Gebeng.
CVM’s shares traded at HK$0.33 on the HK stock exchange, as of 4pm today.
CVMSB, which is headquartered here, was set up in 2007 to mine for dolomite and manufacture magnesium ingots in Malaysia.
It has been operating in Perak since June 2009 and is also exploring mining iron ore, coal and manganese.
CVM’s chairman, Goh Sin Huat, was formerly Ho Wah Genting Berhad CEO.
Ho Wah Genting, which also holds a stake in CVM, has also been reported as saying it would venture into tin mining to widen its earnings base.
The company also said that the deal with Perak’s investment arm has yet to be sealed.
“As of the date of this announcement, no legally binding agreement has been entered into between the company and PKNP in relation to the formation of the joint venture,” CVM said in its filing.
PKNP is the Malay acronym for PSDC, which is Perak’s state investment arm. It was also announced that PKNP is interested in taking up 135.3 million of CVM’s shares, which is about 4.73 per cent of the company’s total shares issued.
CVM also said that it would be the major shareholder of the rare earths project in Perak, if the two parties do finally agree to ink the deal.
The company noted that Bukit Merah is under the Northern Corridor Economic region (NCER) to develop human capital, agriculture, manufacturing, tourism and infrastructure.
“In the early nineties, two rare earth processing plants had operated at Bukit Merah to produce mixed rare earth products.
“The board of directors is of the view that due to the steady increase in demand for rare earth, the low export quota set by the government of the People’s Republic of China and the tremendous increase in prices of the minerals, there is good potential to venture into the rare earth mining industry in the Perak state,” CVM added.
Bukit Merah is part of the area known as Belanja, which covers about 11,137 hectares in the Batu Gajah district and has a multiracial population totalling 26,211 people.
