1 Introduction

1 INTRODUCTION

1.1 PROJECT OVERVIEW

1.1.1 Project Title

This Second Schedule Environmental Impact Assessment (EIA) has been prepared for the Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of Neutralisation Underflow (NUF) Solids within the Existing Lynas Advanced Materials Plant (LAMP) Site located on PT 17212, Gebeng Industrial Estate (GIE), Pahang, Malaysia (hereafter referred to as the Project). The Project Proponent is Lynas Malaysia Sdn. Bhd. (Lynas).

The Project will be implemented within the boundaries of the existing LAMP site and will not involve any additional land acquisition.

The eastern sector of the LAMP where the secure landfill will be located and has sufficient space to store up to 10 years’ worth of the NUF produced by the LAMP operations.

Whilst this EIA has been prepared for the storage of NUF in a secure landfill, it is only a temporary measure pending commercialisation. Studies including research projects and field studies have been completed on the application of NUF as a soil enhancer and an alternative raw material for the cement industry. Various submissions have been made to the relevant authorities and Lynas is currently awaiting their approval for commercialisation of the NUF.

1.1.2 Project Location

The LAMP site which covers an area of 100 ha (247 acres) is located within the GIE, an industrial estate dedicated for the establishment of medium and heavy industries in the chemical and petrochemical sectors. The GIE which was developed in the mid 1990s and is strategically located 4 km west of Kuantan Port and approximately 22.5 km north of Beserah Town, a conurbation of Kuantan. The Gebeng Bypass traverses along the western boundary of LAMP and serves as a main link to the East Coast Expressway (Kuala Lumpur-Kuala Terengganu) which is located 20 km west of the Project site.

The regional location of the Project site is shown in Figure 1.1 and an aerial image of the LAMP site within the GIE Is presented in Figure 1.2.

1.1.3 Lynas Advanced Materials Plant

The LAMP, operated by Lynas Malaysia Sdn. Bhd. (Lynas), was commissioned in the fourth quarter of 2012 and began operations in the first quarter of 2013. It has been in operation for the past six years. The plant site (PT 17212) encompasses an area of 100 ha (247 acres) and currently processes up to 95,000 tonnes per annum (tpa) wet weight basis of lanthanide

Chapter 1 : Introduction 1-1

Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang concentrate (equivalent to 83,000 tpa dry weight basis) to produce 20, 000 – 23,400 tpa (LnO or lanthanide oxide basis) of high purity lanthanide compounds. These compounds are in the form of eight different product suites which are exported directly to the company’s global customers based in the Japan, China, Europe and North America. The products are as follows:

• SEG-HRE Oxide • Lanthanum (La) Oxide • Cerium (Ce) Carbonate • Cerium oxide • LaCe Carbonate • LaCe oxide/LaCePr oxide,/LaCeNd oxide • Didymium Oxide • Praseodymium oxide • Neodymium oxide

As one of the largest and modern rare earth processing plants in the world, the technology employed and the design of the LAMP is world-class. LAMP has invested in robust environmental, safety & health protection and monitoring systems, so as to establish best practise in the rare earths industry. This is proven as the company’s operations have been certified under the ISO 9001 Quality Management System (2015), the OHSAS 18001 Health & Safety Management System (2007) and the ISO 14001 Environmental Management System (2015).

It is important to highlight that Lynas’ global customers are committed to sustainable development and therefore purchase raw materials only from sustainably operated companies. This is to ensure their supply chain is also sustainable/green. To this end, Lynas has satisfactorily complied with the requirements of their customers.

1.1.4 Generation of Process Residues or Process By-Products

At the LAMP site, lanthanide concentrate is subjected to three main stages of processing, i.e. (1) cracking and leaching, (2) solvent extraction and (2) product finishing. In the first stage, the concentrate will be roasted with sulphuric acid in rotary kilns at high temperatures and atmospheric pressure and, water leached to produce a lanthanide sulphate solution. This solution will then be subjected to a series of solvent extraction systems for the extraction of the lanthanide elements in solution. The solution will be further separated and purified into the final products (individual lanthanide elements or mixed lanthanide elements) in the product finishing stage.

As a result of the processing of the lanthanide concentration, LAMP currently produces two types of gypsum residues (in solid form) as by-products:

• NUF: Neutralisation Underflow solids. The NUF is synthetic gypsum that is rich in magnesium and is produced when the Solvent Extraction and Product Finishing raffinate is neutralised with lime. The NUF is non-radioactive.

Chapter 1 : Introduction 1-2 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang

• WLP: Water Leach Purification solids. The WLP is an insoluble solid residue that is produced from the Water Leaching & Cracking process. The water leach process stream that is produced after cracking dissolves the majority of the rare earths and some of the iron as soluble sulphates. Post leaching the liquor is partially neutralised with MgO to facilitate separation of the soluble rare sulphates form iron, aluminium and phosphate, which precipitate. The combined insoluble solid residue from the water leach and, the precipitate from the MgO neutralisation step are what is known as WLP. The WLP is classified as very low level radioactive waste (VLLW) under the International Atomic Energy Agency (IAEA)(IAEA, 2009). VLLW is defined as “waste that does not necessarily meet the criteria of exempt waste, but that does not need a high level of containment and isolation and, therefore is suitable for disposal in near surface landfill type facilities with limited regulatory control. Such landfill type facilities may also contain other hazardous waste”.

Between 2012 (when LAMP was commissioned) to August 2014, a third process residue was reported, i.e. the Flue Gas Desulphurization (FGD) solids which refer to the solids formed in the waste gas treatment system known the FGD system. However, because the quantity of FGD formed was very small, and more importantly, because the properties of FGD are similar to the NUF, the solids from the FGD were reported as NUF after August 2014. Similar to NUF, the solids from the FGD system are relatively pure gypsum but unlike NUF, the FGD lacks magnesium content. Both are chemically compatible and therefore are combined and stored as NUF after August 2014.

This EIA addresses the onsite secure landfill dedicated for NUF only1.

1.1.5 Secure Landfill for the Neutralisation Underflow Solids

The NUF which is essentially synthetic gypsum formed as a by-product of LAMP’s processes is classified as scheduled waste (SW 205) under the Environmental Quality (Scheduled Wastes) Regulations, 2005. Therefore, the storage of NUF, a scheduled waste, needs to be carried out within a secure landfill or storage facility.

The term ‘secure landfill’ refers to five engineered cells, each referred to as Dry Storage Facility (DSF) constructed for the storage of NUF, comprising:

• One existing cell (DSF 1) (constructed in 2007 and operational since the first quarter of 2013) • Four future cells (DSF 2, DSF 3, DSF 4 & DSF 5) (to be constructed between 2019 and 2029)

1 The WLP residue stream comes under the purview of the Atomic Energy Licensing Board (AELB) and regulated in accordance with the requirements of the Atomic Energy Licensing Act, 1985. Therefore, the management of the WLP is not addressed in this report.

Chapter 1 : Introduction 1-3 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang

The secure landfill is designated only for the storage of NUF residue generated from the LAMP process operations. No other third-party scheduled waste will be disposed within this onsite landfill.

1.1.6 Quantity of Neutralisation Underflow Solids Generated to Date

NUF is produced at an average monthly rate of 32,791 metric tonnes and the total quantity of NUF produced between commencement of LAMP operations (2013) to 30th November 2018 is 0.867 million metric tonnes (dry weight) which is equivalent to 1.44 million metric tonnes (wet wt.) Table 1.1 lists the quantities generated since January 2013 to December 2018 in dry weight tonnage. The profile of NUF generation is illustrated in Graph 1. The LAMP was under its scheduled preventive maintenance during the month of December 2018 and this is reflected in the low quantity of NUF generated. The trend is a reflection of the plant’s ramp up to design rates over the period.

Table 1.1: NUF Monthly Dry Weight Production (2013 – 2018) NUF (Dry 2013 2014 2015 2016 2017 2018 wt.) Jan 101.64 4457.09 8815.87 12709.4 16654 20421.5 Feb 164.56 3997.84 9661.64 10230 16764 18221.5 March 459.8 6417.46 9257.06 11610.5 19701 22583 Apri 503.36 7102.89 9057.46 13618 17248 19838.5 May 614.68 8285.95 8575.97 15774 18381 19134.5 June 817.96 8035.95 8496.84 16445 18793.5 21395 July 1127.72 8417.29 9302.37 19690 20212.5 23446.5 August 1137.29 7019.32 9265.52 17737.5 18414 21433.5 September 1219.68 8335.51 11839.85 15119.5 18117 24772 October 1959.76 8060.22 14023.9 18132.4 18997 25173.5 November 3053.16 8896.68 11140.8 17286.5 12848 22995.5 December* 2836.68 8634.42 13558.05 17803.5 20289.5 2211 *: The quantity of NUF produced in December is low because the LAMP is under preventive maintenance

The storage philosophy assumes a storage period of 10 years as Lynas is confident that during this time the NUF can be successfully commercialised whereby the NUF will be removed offsite from the DSFs for other industrial applications. The total available space for NUF storage on the LAMP site as of November 2018 is 4.9 million m3 whilst the estimated space required for the storage of NUF (generated over a period of 10 years) is 4.4 million m 3. This means there is an extra of 500,000 m3 or 0.5 million m3 of space that will be still available. Therefore, the LAMP site has sufficient area for the storage of NUF over the next 10 years (2028).

Chapter 1 : Introduction 1-4 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang

Graph 1: NUF residue monthly production rate (2013 – 2018

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1.2 LOCATION OF THE SECURE LANDFILL

The area designated for the secure landfill within the LAMP site covers an area of approximately 39 hectares (89 acres) within the eastern sector of the LAMP site. The western portion houses the LAMP. The boundary coordinates for the LAMP site and specifically the area to be occupied by the secure landfill are presented in Table 1.1.

Table 1.1: Coordinates of the LAMP Site and the NUF Secure Landfill

Location Points Coordinates LAMP Site NE A 4 00’ 30.1” N 103 22’ 59.2” E NW B 4 00’ 18.2” N 103 22’ 15.4” E SW C 3 59’ 53.9” N 103 22’ 25.1” E SE D 4 00’ 5.9” N 103 22’ 57.3” E Proposed Secure Landfill NE 1 4 00’ 30.1” N 103 22’ 59.2” E NW 2 4 00’ 23.5” N 103 22’ 36.4” E SW 3 4 00’ 0.2” N 103 22’ 44.5” E SE 4 4 00’ 5.9” N 103 22’ 57.3” E

The latest layout of the LAMP site which indicates the location of the processing plant as well as the area demarcated for the secure landfill for storage of NUF are presented in Figure 1.3a and Figure 1.3b.

The Project involves the construction of four aboveground engineered cells (DSF 2, DSF 3, DSF 4, DSF 5) located within the eastern sector of the LAMP site. One DSF (DSF 1) has already been constructed and is currently in operation at the LAMP site. Together, the 5 DSFs constitute the secure landfill.

1.3 LEGAL REQUIREMENT

1.3.1 Environmental Quality (Prescribed Activities) (Environmental Impact Assessment) Order 1987

Prior to the start of construction of the LAMP, an EIA was conducted under the then Environmental Quality (Prescribed Activities), (Environmental Impact Assessment) Order, 1987 2 and submitted to the Department of Environment (DOE) Pahang for review and

2 The Environmental Quality (Prescribed Premises)(Environmental Impact Assessment) 1987 has been rescinded and replaced by the Environmental Quality (Prescribed Premises)(Environmental Impact Assessment) 2015.

Chapter 1 : Introduction 1-6 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang approval. The approval was granted on the 15th of February, 2008 (EIA Approval Letter Ref: AS.C(S)35/119/104/001(512008), as presented in (Appendix 1.1). To date, Lynas has complied with all the EIA approval conditions imposed by DOE Pahang with respect to the plant design and construction including the NUF storage cells.

Pursuant to the EIA, an Environmental Management Plan (EMP) was submitted to DOE Pahang and approval obtained in 2008. Based on the requirements of the EIA approval conditions and the EMP, Lynas undertakes periodical monitoring programmes and reporting for the following:

• Groundwater quality • River (Sg. Balok) water quality • Treated effluent discharge quality • Ambient air quality • Stack emissions • Boundary noise

1.3.2 Environmental Quality (Prescribed Activities) (Environmental Impact Assessment) Order 2015

Section 34A of the Environmental Quality Act 1974 (and its Amendments) requires any person intending to carry out a prescribed activity to submit a report on the impact on the environment to the Director General of the Department of Environment (DOE) for examination. The Environmental Quality (Prescribed Activities) (Environmental Impact Assessment) Order 2015 lists 17 Prescribed Activities that require the submission of an EIA to the Director General of the Environment for approval. Based on the list of projects listed under Environmental Quality (Prescribed Activities) (Environmental Impact Assessment) Order, 2015, the proposed Project captured under the Second Schedule, item 14, Waste Treatment and Disposal (a): Scheduled Waste (iv): Construction of Landfill Facility.

As such, Lynas is required to submit a Schedule II EIA report prior to the implementation of the Project. As part of the Schedule II EIA report submission process, the DOE requires Lynas to first submit a Terms of Reference (TOR) for endorsement prior to commencement of the study. The TOR was prepared and submitted to the DOE Putrajaya on the 22nd of December 2018 and endorsement by the department was received via their correspondence dated 12th February 2019 (Ref: JAS 37/209/200/075 Jilid 23 (13) (Appendix 1.2).

1.3.3 Environmental Quality (Prescribed Activities) (Scheduled Waste Treatment and Disposal Facilities) Order 2015

The secure landfill used for the storage of NUF is defined as a ‘prescribed premise’ under the Environmental Quality (Prescribed Premises)(Scheduled Wastes Treatment and Disposal Facilities) Order, 1989. The operation of a prescribed premise require requires a licence under the Environmental Quality (Prescribed Premises)(Scheduled Wastes Treatment and Disposal

Chapter 1 : Introduction 1-7 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang

Facilities) Regulations, 1989. One of the criteria for the application of the licence is the EIA approval. Hence, the need for this Schedule II EIA.

1.4 PROJECT PROPONENT

The Project Proponent is Lynas Malaysia Sdn. Bhd. The company currently owns one of the few commercially viable lanthanides deposit outside of China, at Mount Weld in Western Australia. The Mt. Weld Central Lanthanide Deposit (CLD) is one of the highest-grade of rare earth deposits in the world. Lynas processes the CLD ore at the Mt. Weld Concentration Plant to produce a rare earth concentrate that is sent for further processing at the LAMP site in Malaysia.

Any enquiries regarding the proposed Project can be directed to the following personnel representing the Project Proponent. Contact details of the representative are given below:

Address : Lynas Malaysia Sdn. Bhd. PT 17212, Jalan Gebeng 3, Kawasan Perindustrian Gebeng, 26080 Kuantan, Pahang Darul Makmur, Malaysia Tel & Fax : +609-582 5200 & +609-582 5291 Contact Person : Dr. Ismail Bahari, General Manager, Radiation Safety, Regulations & Compliance Grant McAullife, General Manager of LAMP

E–mail : [email protected] : [email protected]

1.5 ENVIRONMENTAL CONSULTANT

AGV Environment Sdn. Bhd. (AGV) has been appointed by Lynas Malaysia Sdn. Bhd. to prepare a Schedule II EIA report for the proposed secure landfill Project as required by the DOE of Putrajaya.

AGV is a multi – disciplinary consulting firm specialising in environmental, health and safety. The company has a pool of senior environmental consultants, health and safety consultants who have more than 20 years of experience in the relevant sector and possesses the required registrations with the Department of Environment Malaysia.

All questions pertaining to this document shall be directed to:

AGV Environment Sdn. Bhd. (1155709-T)

Address : 100-06-035, Block J, 129 Offices, Jaya One, No 72A, Jalan Universiti, 46200 Petaling Jaya,

Chapter 1 : Introduction 1-8 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang

Selangor Darul Ehsan, Malaysia

Telephone : 03-7931 1456 Fax : 03-7931 3512 Contact Persons : Dr. Vijayalakshmi Samuel, Principal Consultant Ms. Tan Kim Fong, Principal Consultant

E-mail : [email protected] [email protected]

Tables 1.2 a and 1.2 b list the EIA study team members comprising DOE-registered professionals and, other supporting technical consultants, respectively.

Chapter 1 : Introduction 1-9 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang

Table 1.2a : EIA Study Team (EIA Consultant)

Registration with DOE Years of No. Name Qualification Registration Study Area Signature Experience Category Area/Field ID No. Expiration Date EIA Team Leader • Industrial Dr. Vijayalakshmi BSc., MSc., EIA Processes Technical review; 1 23 years C0105 31st Dec 2019 Samuel PhD Consultant • Water Quality Water Quality

EIA Team Members • Water Quality Waste B. Sc. • Scheduled EIA Management, 2 Tan Kim Fong (Chemistry 26 years Waste C0103 31st July 2020 Consultant Environmental and Biology) Management Management Plan

• Air Quality & Odour B. Sc. • Chemical (Chemistry); EIA Processes Air Impact 3 Tan Poh Aun M. Tech. 21 years C0104 31st Dec 2019 Consultant • General Assessment (Environmenta Environmental l Management) Management

• Water Pollution M. Eng Control – Subject Hydrology and 4 Dr. Saim Suratman 18 years Hydrogeologic SS1086 31st Dec 2020 Consultant Hydrogeology al studies

Chapter 1 : Introduction 1-10 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang

Registration with DOE Years of No. Name Qualification Registration Study Area Signature Experience Category Area/Field ID No. Expiration Date • Water Quality • Air Quality & B. Tech. Odour Baseline Study; Josiah Yong Say (Environment); Assistant 9 7 years • Hydrology AC1053 - Hydrology; and Jee M.Sc. (Env. Consultant • General Water Quality Engineering) Environmenta l Management Subject Specialist

PhD (Business Dr. Kamaruzaman Administration); 8 M. Public Administration; • Social Impact Assessment S 032 Bin Ujang B. (Economic)

Table 1.2b : Other Technical Consultants

No Company Technical Services Contact Person

1 Geomapping Technology Sdn. Bhd. Geotechnical and Civil Engineering Dharam Singh, BEng (Hons)(Civil&Struc)(UKM) Consultants

Chapter 1 : Introduction 1-11 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang

1.6 OBJECTIVES OF THE STUDY

The objectives of this EIA study are listed below:

• To identify and assess the potential environmental impacts arising from the implementation of the proposed Project within the existing LAMP site in Gebeng Industrial Estate; • To recommend suitable mitigating measures that can be incorporated into the design and operation of the proposed onsite secure landfill Project to reduce the predicted impacts to meet prevailing regulatory requirements; • To identify any residual impacts that may exist even after implementation of mitigating measures; • To outline the requirements of an Environmental Management Plan (EMP) to address these impacts.

1.7 ORGANISATION OF THE REPORT

This EIA report is organised in the following manner:

Chapter 1: Introduction provides the background to the proposed development, the legal requirements, the Project Proponents, environmental consultants and supporting consultants.

Chapter 2: Terms of Reference (TOR) provides the TOR of the EIA study which has been endorsed by DOE Putrajaya.

Chapter 3: Statement of Need provides a brief description of the need of the proposed secure landfill development.

Chapter 4: Project Options addresses the various options considered in the site selection, and the evaluation of the Project options by weighing the benefits of the Build-Out Option and No-Build Option.

Chapter 5: Project Description provides a detailed description of the activities to be carried out during the construction and occupational phases of the proposed Project.

Chapter 6: Existing Environment describes the baseline environmental conditions within a 5 – km radial distance from the site.

Chapter 7: Evaluation of Impacts assesses the potential environmental impacts arising from the implementation of the project during both the construction and operational phases.

Chapter 8: Mitigation Measures outlines the appropriate measures which can be adopted and incorporated into the design and implementation of the Project to effectively eliminate, prevent, and minimise predicted adverse impacts. Emergency response plan as part of the control measures are incorporated in this chapter. Summary of the compliance audit of the existing plant are also included.

Chapter 1 : Introduction 1-12 Environmental Impact Assessment: Proposed Onsite Secure Landfill (Prescribed Premise) for the Storage of NUF Solids within the Existing LAMP Site located on PT 17212, Gebeng Industrial Estate, Kuantan, Pahang

Chapter 9: Environmental Management Plan identifies the residual impacts and outlines a suitable management and monitoring plan to address these impacts.

Chapter 10: Conclusion and summary of the findings of the study.

Chapter 1 : Introduction 1-13