Economic determinants and future contributions of the … Zaidee Laidin.pdf · Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's

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

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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

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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.

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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.

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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

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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


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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)

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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)


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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.


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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

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MALAYSIA's ECONOMIC

AGENDA cont.

• Where we are now:

• Economic Achievements;

• Young government & Strong

Democracy

• Reality Check; fiercely

competitive ASEAN

environment


123

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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


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• 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


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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

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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

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• 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


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• 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).

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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

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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)


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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


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


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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.

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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.

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THANK YOU

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Economic determinants and future contributions of the … Zaidee Laidin.pdf · Economic determinants and future contributions of the rare earth sector to a green economy-Malaysia's