The Mineral Industry of Malaysia in 2001
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THE MINERAL INDUSTRY OF MALAYSIA By John C. Wu Malaysia has large resources of tin. Most of the high-grade Environmental Issues tin reserves, however, were depleted or are beneath developed lands. Malaysia has substantial resources of such tin- associated After the conservation group had failed in an attempt to turn minerals as ilmenite, monazite, struverite (a columbium mining ponds in Malim Nawar, near Ipoh in Perak, into a nature (niobium)/tantalum-bearing mineral), and zircon; natural gas reserve in 1999, the Malaysian Nature Society (MNS) submitted and crude petroleum. Other important mineral resources are a proposal to Perak State government in September 2000 for barite, bauxite, carbonate rocks, clays, coal, copper, gold, iron converting a tract of old tin mining land in Batu Gajah, Perak, ore, and silica (Minerals and Geoscience Department into a recreation-and-conservation site, which would be called [Malaysia], 2001a, p. 4). Malaysia’s tin reserves ranked 2d Kinta Park. A technical committee, which comprised the Land (Carlin, 2002), its rare earths reserves ranked 10th (Hedrick, and Mines Department, the Drainage and Irrigation Department, 2002), and its reserves of natural gas and crude petroleum the National Parks, the Wildlife Protection Department, and the ranked 14th and 28th in the world, respectively (Oil & Gas MNS, had been created to work out the details of the park plan. Journal, 2001b). The Perak State government had allocated about $167,000 to In 2001, Malaysia’s economy, as measured by gross domestic develop basic facilities for the first year. Under the MNS plan, product (GDP), grew only slightly owing to a considerable the park activities may include birdwatching, wildlife watching, decline in the output of the manufacturing sector, despite the nature photography, angling, boating, trekking, scientific continued growth in the agriculture, forestry and fishing, research, and nature education. The area’s tin-mining heritage construction, and other sectors. According to the Department of would also be promoted (Malaysia Tin Bulletin, 2001c). Statistics [Malaysia], Malaysia’s GDP, in 1978 constant dollars, In October 2001, LSK Enterprise Sdn. Bhd., which was the grew by 0.4% in 2001 compared with 8.3% in 2000. The owner and operator of a tin-tailings Amang (retreatment) plant output of the manufacturing sector, which grew by 21.0% in at Jalan Gopeng in Simpang Puali, Perak, was fined a total of 2000, had a 5.1% negative growth in 2001 mainly owing to $22,400 on two counts of dealing in radioactive tin slag without reduced output of electrical and electronics products. The a licence from the Atomic Energy Licensing Board. The output of the mining and quarrying sector grew only 0.2% in company was fined $13,200 on pleading guilty under Section 2001 compared with a 3.1% growth in 2000. In 2001, the 16 (5) of the Atomic Energy Licence act of 1984 in dealing in mining and quarrying sector contributed 6.9% to Malaysia’s 98 gunny sacks of radioactive tin slag without a licence from GDP. Malaysia’s GDP, in 1987 constant dollars, was estimated the board. The company also was fined $19,200 on a second to be $55.3 billion, of which $3.8 billion was contributed by the charge of unlawfully dealing in three gunny sacks of tin slag at mining and quarrying sector (Central Bank of Malaysia, the same factory premises 2 days later (Malaysian Tin Bulletin, 2002§1). 2001c). Government Policies and Program Production During the Asian financial crisis, the Malaysian Government In 2001, Malaysia’s minerals production included barite, imposed a stringent capital control to prevent foreign investors bauxite, coal, dolomite, feldspar, gold, ilmenite, iron ore, kaolin, from fleeing the Malaysian stock market in 1998. In February limestone, mica, monazite, natural gas, crude petroleum, sand 1999, the Government shifted to imposing up to a 30% exit tax and gravel, silica, struverite, tin, and zircon concentrate. depending on the length of time the funds had been in Malaysia. Production of struverite increased sharply in 2000 and 2001 In September 1999, the exit tax was changed to a flat 10% because of increased world demand for the raw material for the regardless of time invested. In October 2000, the Government production of tantalum metal products, while production of tin announced that only profit repatriated within one year would be decreased because of lower tin prices in the Kuala Lumpur Tin taxed effective February 1, 2001, and that there would be no Market (KLTM). Malaysia ceased copper production at the more exit tax beginning on May 2, 2001 (Nikkei Weekly, Mamut Mine in Sabah in 1999. As a result, there had been no 2001). silver production as byproduct of copper mining since 2000, but a very small quantity of silver was produced as byproduct of gold mining in the State of Pahang in 2000 and 2001. Production of coal increased substantially in 2001 owing to increased demand by the cement industry. Production of 1References that include a section twist (§) are found in the Internet References processed mineral products included cement, refined gold, Cited section. liquefied natural gas (LNG) , nitrogen fertilizer materials THE MINERAL INDUSTRY OF MALAYSIA—2001 16.1 (ammonia and urea), refined lead (secondary), refined sold to the domestic cement manufacturers, and chemical- and petroleum products, crude steel, titanium dioxide pigment, and refractory-grade bauxite were exported to Taiwan, Thailand, the refined tin (table 1). United States, and Vietnam. The 1999 proposal of Comalco Aluminium Co. Ltd. of Trade Australia to build a 1.5-million-metric- ton-per-year (Mt/yr) alumina refinery at Similajau near Bintulu, Sarawak, had not According to the Department of Statistics [Malaysia], total materialized. Comalco Aluminium had decided to build the 1.5- exports decreased by 10.4% to $88 billion, and total imports Mt/yr alumina refinery at Gladstone in central Queensland, decreased by 9.9% to $74 billion in 2001. Malaysia’s Australia, following the conclusions of feasibility studies, which merchandise trade surplus shrank by 13.1% to $14 billion had been completed in October 2000 (Metal Bulletin, 2002). because of a substantial decline in exports in 2001 (Ministry of The 2000 proposal to build a 500,000 metric-ton-per-year International Trade and Industry, 2002b§). Malaysia remained (t/yr) aluminum smelter in the District of Manjung, Perak, by a net exporter of minerals in 2001 because of its large exports of Charus Development Corp. of the United States had been hydrocarbons in the form of LNG, crude petroleum, and refined approved by the joint-venture partners in 2001 and was petroleum products. In 2001, minerals exports totaled $8.5 expected to commence groundbreaking work in 2002. The billion and accounted for 9.7% of total exports. Minerals proposed joint-venture aluminum smelter, which would be imports totaled $4.0 billion and accounted for 5.4% of total called Malaysia Aluminium Smelting Co., would be owned by imports. Malaysia had a minerals trade surplus of $4.5 billion Charus Development (20%), a group of investors from Hong in 2001. Kong (18%), the State Development Corp. of Perak (15%), and Among the major mineral exports, crude petroleum was other investors (47%) (Metal Bulletin, 2001b). The valued at $2.9 billion; LNG, $3.0 billion; refined petroleum groundbreaking work, however, would not take place until a products, $2.0 billion; and other mineral products, $566 million. report was completed by the local environmental authorities Among the major mineral imports, refined petroleum products concerning pollution at the proposed smelter site and the were valued at $1.8 billion; crude petroleum, $1.6 billion; metal availability of low-rate electricity was secured for the project ore and scrap, $206 million; crude minerals, $167 million; and from the power supplier—Tenaga Nasional Berhad (Metal other mineral products, $215 million (Ministry of International Bulletin, 2001a). Trade and Industry, 2002a§). Gold.—In 2001, about 85% of the gold production was from Structure of the Mineral Industry the Penjom Mine in Pahang, and 15% was from two alluvial gold mines in Pahang and four in Kelantan in the central belt of Malaysia’s mining industry consisted of a small sector of coal peninsula Malaysia. There was no gold production from the and nonferrous metals mining, a small mineral-processing Bau area of Sarawak in 2001. sector of ferrous and nonferrous metals, and a large mining and Avocet Mining PLC operated the Penjom gold mine at processing sector of industrial minerals and oil and gas. With Ampang Jaleh near Kuala Lipis through Specific Resources the exception of oil and gas, mining and mineral-processing Sdn. Bhd., which was its subsidiary. In 2001, the gold businesses were owned and operated by private companies production from the Penjom Mine was lower than the 3,387 incorporated in Malaysia. Oil and gas exploration and kilograms (kg) produced in 2000. According to Avocet Mining, exploitation businesses were owned and operated by the state- based on the classification guideline set out in the 1999 owned oil and gas company and by joint ventures of the state- Australian Code for Reporting of Mineral Resources and Ore owned oil and gas company and foreign companies. According Reserves, Penjom’s total mineral resources, as of October 1, to the Department of Statistics [Malaysia], as of June 2001, the 2001, were estimated to be 5.2 million metric tons (Mt) at a total number of persons employed by the mining and quarrying grade of 4.69 grams per metric ton (g/t) gold, of which 2.1 Mt industries was estimated to be 19,700, or about 0.2% of the total was measured reserves at a grade of 5.56 g/t gold; 1.3 Mt, employed labor force of about 9.8 million (Department of indicated reserves at a grade of 4.32 g/t; 1.3 Mt, inferred Statistics [Malaysia], 2002, p.