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Ahmad Zaidee bin Laidin FASc
UQ Rare Earth Mineral Symposium 31 may 2013
Economic determinants and future contributions of the rare earth
sector to a green economy-Malaysia's Perspective
!1
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
MALAYSIA
• Population: (2010) -28.3 million
• Area: 329,847 km2
• GDP (PPP) 2012 -USD491.967 billion
• Per capita USD$16,942
• GDP (nominal) USD307.178 billion
• Per Capita. USD10,578
!2
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
DEFINITION OF GREEN ECONOMY
• United Nations Environment
Programme (UNEP) defines green
economy as "one that results in
improved human well-being and
social equity, while significantly
reducing environmental risks and
ecological scarcities."
• Green economy is one which is low-
carbon, resource efficient and
socially inclusive.
!3
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
DEFINITION OF GREEN ECONOMY cont.
• The Global Citizens Center, ( Kevin Danaher)
activist, defines green economy in terms of a "triple
bottom line," an economy concerned with being
• 1. Environmentally sustainable, based on the belief
that our biosphere is a closed system with finite
resources and a limited capacity for self-regulation
and self-renewal.
• 2. Socially just, based on the belief that culture and
human dignity are precious resources that, like our
natural resources, require responsible stewardship
to avoid their depletion..
• 3. Locally rooted, based on the belief that an
authentic connection to financial sustainability is
the essential pre-condition to sustainability and
justice.
!4
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
POLITICAL ECONOMIC & SOCIAL
LANDSCAPE
• Malaysia's Case-GE 13, BN -133,
PR-89
• Major Producer of Rare Earths by
virtue of the presence of LAMP
• Malaysia's own production of Rare
Earths before LAMP-Asian Rare Earth
(1982-1993)
• Malaysia's commitment to Green
Economy
!5
COMMITMENT TO GREEN ECONOMY
• Commitment to reduction of CO2-Prime Minster
of Malaysia, Najib Razak, delivered Malaysia's
proposal to reduce its Carbon emission intensity
per GDP to 40 per cent by the year 2020
compared with its 2005 levels, subject to
assistance from developed countries. Copenhagen,
Denmark. 17/12/2009.
• Forward- looking legislations on Green
Technologies- National Green Technology and
Climate Change council
• Intensifying RE & EE
• Feed-in Tariff
• Green Technology Financing Scheme 2010, for
both producer and user of Green technology
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
!6
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
COMMITMENT TO GREEN -SIX SECTORS.
Definition of a Green economy, Karl Burkart
defines a green economy as based on six main
sectors:[4]
1. R energy (solar, wind, geothermal, marine
including wave, biogas, and fuel cell)
2.Green buildings (green retrofits for energy
and water efficiency, residential and
commercial assessment; green products and
materials, and LEED construction)
3. Clean transportation (alternative fuels,
public transit, hybrid and electric vehicles,
carsharing and carpooling programs)
!7
SIX SECTORS OF GREEN ECONOMY -
cont.
4. Water management (Water reclamation,
greywater and rainwater systems, low-
water landscaping, water purification,
5.Waste management (recycling,
municipal solid waste salvage, brownfield
land remediation, sustainable packaging)
6. Land management (organic agriculture,
habitat conservation and restoration;
urban forestry and parks, reforestation
and afforestation and soil stabilization)
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
!8
VISION 2020- MALAYSIA's ECONOMIC
AGENDA
• Malaysia's Ecomomic Agenda: by 2020
the nation would be a developed
country
• Confining to Rare Earths sector, there
is a considerable opportunity because
Malaysia is blessed by reasonably
cheap electricity, availability of water
and land, good communication and
physical infrastructure, including
airports, sea ports, rail, and financial
and related services.
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
!9
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
KRAs -GOVERNMENT
TRANSFORMATION PROGRAMME
• Reducing Crime
• Fighting Corruption
• Improving Student Outcomes
• Raising Living Standards
• Improving Rural Basic Infrastructure
• Improving Urban Transport
• Addressing Cost of Living
!10
MALAYSIA's ECONOMIC
AGENDA cont.
• Where we are now:
• Economic Achievements;
• Young government & Strong
Democracy
• Reality Check; fiercely
competitive ASEAN
environment
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
123
!11
ADAM SMITH's CLASSICAL APPROACH
• Resources required for generation of goods or
services, generally classified into four major
groups: (1) Land (including all natural
resources), (2) Labor (including all human
resources), (3) Capital (including all man-made
resources), and (4) Enterprise (which brings all
the previous resources together for production).
• These factors are classified also as management,
machines, materials, and money (this, the 4 Ms)
• More recently, knowledge has come to be
recognized as distinct from labor, and as a factor
of production in its own right.
• Energy
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
!12
• Resource: at least 30,000 tons of
Rare Earths found in the residual
tin deposits
Key strategies:
1. Enhance environment, safety, and
health aspects of Industrial Estates in
Malaysia
2. Undertake a national exercise to
map in detail, the potential RE
alluvial and hard rock deposits and
their economic potential
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
!13
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
3. Incentivise upstream mining
and midstream (extraction) of
RE through partnership with
global players with technology,
market & finance
4. Incentivise investments in
downstream manufacturing of
RE based products to target
export market
!14
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
5.Build key competence in Human Capital
for entire value chain-processing,refining,
manufacturing, logistics etc.
6.Strengthen legal & regulatory framework
to enable effective functioning functioning
of the RE business
7.Undertake coordinated,
comprehensive,and continual public
awareness programme and pursue regular
engagement with the community on risks
and opportunities of new technology-
based business. SOCIAL IMPACT
ANALYSIS
!15
• Focusing on development of
factors of production.
• LAND-creation of Industrial
Park adjoining the existing
LAMP site.-Malaysia-China
Kuantan Industrial Park in Feb
2013
• Cheap electricity, water, acids
materials, and human resources
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
!16
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
• OPERATIONALISING THE
STRATEGIES
• LAND
• Exploiting Malaysia's own reserves of
Rare Earths sources through
prospecting existing and new sites and
sources
• Developing Human Capital (upgrading
existing universities, polytechnics, and
technical institutes) and training (local
and foreign).
!17
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
OPERATIONALISING THE
INITIATIVES
LABOUR
• Developing Human Capital
(upgrading existing 44
universities, 25 university colleges,
21 polytechnics, and 537 other
colleges and technical institutes)
and training (local and foreign)
• Enhancing R&D
!18
CAPITAL (including all man-made
resources),
• involving entrepreneurs internally,
through Chambers of Commerce, and
internationally, Joint Ventures and GLCs
• Institutional Investors-Employees
Provident Fund, AMANAH SAHAM
Malaysia Unit Trust, Khazanah Malaysia
(Sovereign Wealth Fund), Pilgrim Trust
Fund, etc.
• Investment Bankers
ENTERPRISE (which brings all resources)
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
!19
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
Forecast world demand for RE elements in 2012
REO. Demand. Supply/Production Xenotime. Monazite
• Lanthanum 54,000 28.0%. 59,000. 27.0%. 1.24%. 23.00%
• Cerium. 69,000. 37.0%. 89,000 40.0%. 3.13%. 46.20%
• Praseodymium 7,000. 4.0%. 10,000 5.0%. 0.5%. 4.60%
• Neodymium 39,000. 20.0%. 36,000. 16.0%. 1.6%. 19.7%
• Samarium. 2,000 1.0%. 4,500. 2.0%. 1.1%. 3.2%
• Europium. 1,100. 0.5%. 1,000. 0.4%. 0.20%. 0.10%
• Gandolinium 200. 0.1%. 3,500. 1.6%. 3.5%. 0.8%!20
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
REO. Demand. Supply/Production Xenotime. Monazite
• Terbium. 600. 0.3% 300. 0.15%. 0.9%. N.a.
• Dysprosium 2,500 1.4%. 2,000 0.9%. 8.3%. N.a
• Erbium. 850.0.5%. 1,000. 0.4%. 6.4%. N.a
• Yittrium. 13,000-7.0%. 12,000 -5.5%. 61.0%. 2.0%
• Ho-Tm-Yb-Lu. 250-0.2%. 1,200- 1.15%
Total. 190,000-100%. 220,000-100%
• Source: Roskill/Johnson, G. W., and Sisneros, T.E., !21
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
!22
Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's Perspective
OPPORTUNITIES for DOWNSTREAM
• Yttrium-Energy efficient light bulbs,
yttrium iron garnet(YIG) microwave
filters etc.
• Cerium-chemical oxidizing agent,
polishing powder, etc.
• Praseodymium-Rare earth magnets,
lasers, colorant in glasses and enamels
etc.
• Neodymium-RE magnets, lasers, violet
colours in glass & ceramics etc.
• Samarium-RE magnets,lasers, masers etc.
!23
CONCLUDING REMARKS
• In spite of the hiccups, LYNAS is
greatly welcomed by the scientists,
technologists and the entrepreneurs
• It puts Malaysia on the Rare Earth
map.
• It would trigger economic growth in
upstream, midstream and
downstream activities for Rare
Earths.
• Thank Australia for this new
potential for economic growth.
!24
THANK YOU
!25
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