The Mineral Industry of Malaysia in 2014
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2014 Minerals Yearbook MALAYSIA U.S. Department of the Interior October 2017 U.S. Geological Survey THE MINERAL INDUSTRY OF MALAYSIA By Lin Shi In 2014, Malaysia’s real gross domestic product (GDP) in the efficiency of public services and improvement of increased by 6.0% compared with an increase of 4.7% in 2013 Government accountability. The New Economic Model was and an increase of 5.6% in 2012. An increase in domestic issued by the National Economic Advisory Council and last demand and growth in the country’s exports contributed to updated in 2012; it was aimed at transforming the country’s economic growth. The output of the mining and quarrying economy into one that was market-based, regionally integrated, sector increased by 3.1% in 2014 compared with increases of entrepreneurial, and innovative (Economic Planning Unit, 2015a: 0.7% (revised) in 2013 and 1.0% (revised) in 2012. The rate of 2015b, p. 13, 98–99; 2015c; Wawasan2020.com, 2015a, b). growth in the manufacturing sector increased by 6.2% in 2014 compared with increases of 3.5% (revised) in 2013 and 4.8% in Production 2012. The rate of growth in the construction sector increased by The levels of production of most of the country’s mineral 11.6% in 2014 compared with increases of 10.9% in 2013 and commodities stayed about the same in 2014 as in 2013. The 18.6% in 2012 (Bank Negara Malaysia, 2015, p. 14). mineral commodities that had significant increases in production Minerals in the National Economy were bauxite, which increased by 1,461%; pig iron, by 72%; and clays, by 11%. Production decreased for several mineral Malaysia has historically been a major source of tin. Most of commodities in 2014. Among the most significant decreases the high-grade tin reserves in the country have been depleted, were ilmenite (gross weight), by 49%; iron ore (gross weight), however, or were under developed lands. Malaysia had tin- by 21%; and iron ore (Fe content), by 13% (table 1). associated mineral resources, such as ilmenite, monazite, struverite [a niobium (columbium) and tantalum-bearing Structure of the Mineral Industry mineral], and zircon. Malaysia also had identified mineral Metallic and nonmetallic mineral-processing facilities were resources of barite, bauxite, clays, coal, copper, gold, iron operated by private companies incorporated in Malaysia. The ore, limestone, natural gas, petroleum, silica, and silver. state-owned Petroliam Nasional Berhad (Petronas), together After many years of exploitation, however, such minerals with its subsidiaries, operated as an integrated oil and gas as barite, copper, and ilmenite were depleted. During the company in Malaysia and internationally. Petronas engaged 20th century, mineral production played an important role in the exploration, development, production (liquefaction, in Malaysia’s national economy. In 2014, the mining and manufacturing, and refining), transportation, and sale (trading quarrying activity accounted for 7.9% of the country’s real GDP and marketing) of crude oil and natural gas products (liquefied (Bank Negara Malaysia, 2015, p. 17). natural gas [LNG] and petroleum). It also owned and operated a Government Policies and Programs network of retail stations (table 2; Bloomberg, 2015). In Malaysia, mineral sector activity is governed by the Mineral Trade Mineral Development Act 1994 and the State Mineral In 2014, Malaysia’s total trade increased by 5.9% to Enactment. The Mineral Development Act 1994 defines the $482.9 billion from $456.3 billion in 2013. Total exports power of the Federal Government to regulate and inspect increased by 6.4% to $255.3 billion from $239.9 billion in 2013 mineral exploration, mining, and related activities. The State and total imports increased by 5.3% to $227.8 billion from Mineral Enactment gives the States the power to issue mineral $216.4 billion in 2013. Malaysia had a trade surplus in 2014. prospecting and exploration licenses and mining leases. Apart Exports of mineral fuels, mainly LNG, accounted for 22% of from paying a corporate tax to the Federal Government, mine total exports, and exports of chemicals accounted for 7% of total and quarry operators are required to pay value-based royalties exports. Imports of mineral fuels accounted for 17% of total to the State in which their operation is located. Royalty rates imports, and imports of chemicals accounted for 10% of total depend on the mineral commodity and on the assessment of imports. According to the National Trade Promotion Agency each of the individual States (Malaysianminerals.com, 2016). of Malaysia, the country’s major trading partners in 2014 were In June 2010, Malaysia issued the Tenth Malaysia Plan, which Australia, the Association of Southeast Asian Nations (whose included the Government Transformation Programme and member countries were Brunei, Cambodia, Indonesia, Laos, the New Economic Model, aimed at improving the country’s Myanmar [also known as Burma], the Philippines, Singapore, economy, inclusiveness, and sustainability, and providing Thailand, and Vietnam), China (including Hong Kong), Japan, the plan for the country’s development for the next 5 years. the Republic of Korea, European Union member countries, The Government Transformation Programme is in line with and the United States. In 2014, there was steady demand for the national mission of achieving Vision 2020, which was Malaysia’s mineral commodities, such as bauxite and LNG, introduced in 1991 and was intended to transform Malaysia and increased demand for Malaysia’s manufactured products, into a developed country. Among its stated goals were increases in particular electrical and electronic products. Japan and the MALAysia—2014 16.1 United States were Malaysia’s key export markets, and in 90% of mined gold was from the State of Pahang, which was 2014, emerging markets, such as Kenya, Mexico, and other the location of metal refining facilities for Avocet Mining plc countries in Africa, Central Asia, and South Asia, increased their United Kingdom’s gold mine at Penjom, Monument’s Selinsing demand for Malaysia’s commodities. The value of Malaysia’s gold mine at Bukit Selinsing Koyan, and Raub Australian Gold exports to the United States totaled $30,420 million, and Mining Sdn Bhd’s gold mine at Raub. Malaysia produced about the value of goods imported from the United States totaled 4,000 kilograms (kg) of gold in 2014, which was an increase $13,068 million, with about a 50% surplus in trade in 2014 of about 5% from the 3,800 kg (revised) produced in 2013, and (National Trade Promotion Agency of Malaysia, The, 2015; a decrease of about 13% from the 4,600 kg produced in 2012. U.S. Census Bureau, 2015). The Selinsing gold mine was a leading gold producer in the country and reported to produce 1,119 kg (35,983 troy ounces) Commodity Review in fiscal year 2014 (ending June 30) compared with 1,648 kg (52,982 troy ounces) in fiscal year 2013 and 1,387 kg Metals (44,585 troy ounces) in fiscal year 2012. Monument Mining’s processing plant processed more than 1 Mt of ore at an average Aluminum and Bauxite and Alumina.—According to grade of 1.31 grams per metric ton (g/t) gold in fiscal year 2014; the Malaysian Chamber of Mines, bauxite was produced in ore processed in 2013 had an average grade of 2.07 g/t gold Malaysia from a mine located in the State of Johore. Production and, in 2012, 4.24 g/t gold (Monthly Statistical Bulletin, 2015; of bauxite in 2014 was estimated to be 3.26 million metric Monument Mining Ltd., 2015b). tons (Mt) compared with 208,770 metric tons (t) in 2013 and Iron and Steel.—Malaysia’s crude steel production consisted 121,873 t in 2012. All the production was exported to the of cast semimanufactured products, such as billets, blooms, and other Asian countries. Malaysia’s remaining bauxite reserves slabs. Malaysia’s iron mines are located in the States of Johor, were small, but bauxite resources were recently discovered in Pahang, Perak, and Terengganu. Iron ore mined in Malaysia the States of Sabah and Sarawak. In 2014, Malaysia exported was either consumed by domestic industries or exported to about 3.7 Mt of bauxite and imported 11,184 t of bauxite China. Malaysian iron and steel producers imported lumps and compared with exports of 17,422 t (revised) and imports of pellets and steel scrap as raw materials for steelmaking. In 2014, 5,221 t in 2013. Because Indonesia banned exports of bauxite Malaysia mined about 9.6 Mt of iron ore, and produced about (and some other mineral commodities and materials) early in 2.8 Mt of iron and steel bars and rods. In 2014, the MMSB (the the year, Malaysia became an important bauxite supplier to owner of the Mengapur project) entered into a binding purchase China. Demand for Malaysian bauxite in international markets and profit-sharing agreement with Malaysia’s Malaco Mining was expected to continue to increase. Press Metal Sarawak Sdn. Bhd (Malaco), which was the previous owner of the project Sdn Bhd (a subsidiary of Press Metal Berhad) operated and the present owner of the magnetite found in the iron-rich aluminum smelters at Mukah and at Similaijau in the State of topsoil that overlies much of the project. The agreement granted Sarawak. Press Metal expected to have the capacity to produce Monument the right to process and sell magnetite extracted 890,000 metric ton per year (t/yr) of aluminum, including from the topsoil that overlies Area C. Monument would also 121,000 t/yr of billet, in place by 2016 (China Metal Bulletin, purchase approximately 1.2 Mt of stockpiled magnetite as 2014; Aluminum Market Outlook, 2015, p. 2–14; Clean initial inventory at the area (Monthly Statistical Bulletin, Malaysia, 2015; Home, 2015; Malaysianminerals.com, 2015b; 2015, p.