The demand of Chinese corporations for cheap bauxite is ruining the Malaysian environment

From ToxicLeaks

China's rise a an economic superpower has been costly indeed. It has filled the Chinese skies with smog and sacrificed the lives of tens of millions of migrant workers. It now appears that the neighboring countries are paying the bill as well. Chinese demand for aluminium set off a bauxite mining hysteria in Malaysia over the last two years. Two years of environmental nightmare as radioactive dust contaminated the air, water and soil of Malaysia. While the Malaysian government finally halted the exports of bauxite, its true motivations remain unclear and many clues indicate that it's probably just a move to drive bauxite prices up again.

Chinese companies have pushed Malaysia into an uncontrollable bauxite mining frenzy[edit | edit source]

China is the biggest aluminium producer in the world and its aluminium giants, Xinfa and Hongqiao Aluminium, have driven the aluminium demand up for years. They have smelted tons and tons of aluminium for the Chinese construction sector, using up insane amounts of coal generated electricity and exploiting mercilessly migrant workers. They used to import massive amounts of bauxite from Indonesia but the country banned mineral exports in January of 2014 and the Chinese corporations had to find other suppliers. They then turned to other countries in Southeast Asia, namely Malaysia. The production of bauxite exploded and all of it was mined to be shipped to China. The production was multiplied by 8 between 2014 and 2015 and 15 million tons of bauxite ore were shipped out of the port of Kuantan, the capital city of the province of Pahang, every month. While China was the sole buyer of Malaysian bauxite, it had other supplier but none of them provided so much of the valuable ore. And in 2015, Malaysia represented 40 % of China's bauxite imports. When exploitation of natural resources increases this dramatically and over such a short period in a still emerging country, it can't be safe for the environment and the people. Malaysia is sadly confirming this rule.

Shady mining deals driven by greed
[edit | edit source]

The window of opportunity opened by the Indonesian ban spurred a frenzy of bauxite mining in Malaysia. Production grew from 200,000 tons in 2013 to 20 million tons in 2015 ! According to Fuziah Salleh, a member of regional parliament, “It became a whole mad rush(...). There were 44 companies with export licences, and they were all rushing to get as much as they could get from anybody who was willing to sell their raw ore.” Mining companies pressured local farmers into selling them land to mine for bauxite. And local government officials started taking bribes, selling the licences to mine and trade bauxite 150 to 200 times the legal fee. In this climate of corruption, government control over the mining was virtually inexistent and the mining companies tore apart the landscapes of Pahang State, oblivious of all environmental rules. This has caused major pollution and wreaked havoc in the lives of the people of the State.

Tremendous environmental and social impacts[edit | edit source]

The irresponsible bauxite mining is producing massive pollution and health issues for the people living close to the mines. Bauxite mining leaves a red mud residue that is full of radioactive or carcinogenic metals or minerals. It also generates radioactive dust that is carried by wind and contaminates large areas. A farmer from the bauxite mining region, Che Long bin Che Ali, refused to give mining companies access to his land. But he is still paying the price of the reckless mining. Countless lories have passed by his house, carrying red ore, covering his house and land with a layer of red dust which has made the trees of his orchard die. "I am not angry with the bauxite industry. I know it brings income for the government, but it must follow proper regulations. Don't pollute our roads, don't pollute the rivers.” Says Che Long bin Che Ali. But that's precisely the thing, the miners have exploited a regulatory loophole. Indeed environment impact assessment are only required when plots larger than 250 hectares are exploited. Therefore, many companies intentionally leased small areas to avoid having to do the assessment. The price of this fraud will sadly be paid by the people of the area. Dr. Wong Ruen Yuan estimates that the pollution is likely to cause respiratory and skin issues in the near future and lung cancers in the long-run. This brings Fuziah Salleh to voice his bitterness about the disaster : "The greed, the need, of certain people, outweighed welfare of the common people and the authorities allowed it. And I think there is a lesson to be learned." However, the three month suspension of bauxite mining in Malaysia is probably not the change he is hoping for.

A moratorium designed to drive prices up[edit | edit source]

On January 15th the Malaysian government decided a three month moratorium on the bauxite mining. Officially, the moratorium was decided to bring an end to the massive pollution caused by the mining and to cleanup the areas that had been contaminated by bauxite dust such as the mining areas, the roads and the Kuantan port when stockpiles had been polluting the sea. However, the timing of the suspension is incredibly suspicious. It coincided with the Chinese economy's slowdown and subsequent decrease of bauxite demand, which brought the prices down to very low levels. This moratorium could very well be a move to get the prices to rise again, or at least to wait until the market rebounds to get the best price it can from the bauxite. The strategical aspect of the moratorium could become even clearer in the upcoming weeks, as the end of the suspension period draws near. Environmentalist groups are already calling to prolong the moratorium and claim that the cleanup is not following schedule. However, nothing indicates that the Malaysian government will renew it and pass on the sizable income that the bauxite mining represents. No, the most likely scenario is that bauxite mining will resume, perhaps under a heightened government control but given the state of mining technology in Malaysia, this will still mean considerable environmental and human impacts.