mining plant

Mining Plant Malaysia

Malaysia has large resources of tin. Most of the high-grade tin reserves, however, were depleted or are beneath developed lands. Malaysia has substantial resources of such tin- associated minerals as ilmenite, monazite, struverite (a columbium (niobium) tantalum-bearing mineral), and zircon; natural gas and crude petroleum. Other important mineral resources are barite, bauxite, carbonate rocks, clays, coal, copper, gold, iron ore, and silica (Minerals and Geoscience Department [Malaysia], 2001a, p. 4). Malaysia’s tin resen-es ranked 2d (Carlin, 2002), its rare earths reserves ranked 10th (Hedrick, 2002), and its reserves of natural gas and crude petroleum ranked 14th and 28th in the world, respectively (Oil & Gas Journal, 2001b).

In 2001, Malaysia’s economy, as measured by gross domestic product (GDP), grew only slightly owing to a considerable decline in the output of the manufacturing sector, despite the continued growth in the agriculture, forestry and fishing, construction, and other sectors. According to the Department of Statistics [Malaysia], Malaysia’s GDP, in 1978 constant dollars, grew by 0.4% in 2001 compared with 8.3% in 2000. The output of the manufacturing sector, which grew by 21.0%) in 2000, had a 5.1% negative growth in 2001 mainly owing to reduced output of electrical and electronics products. The output of the mining and quarrying sector grew only 0.2% in 2001 compared with a 3.1% growth in 2000. In 2001, the mining and quarrying sector contributed 6.9% to Malaysia’s GDP. Malaysia’s GDP, in 1987 constant dollars, was estimated to be S55.3 billion, of which S3.8 billion was contributed by the mining and quarrying sector (Central Bank of Malaysia, 2002§’).

Government Policies and Program

During the Asian financial crisis, the Malaysian Government imposed a stringent capital control to prevent foreign investors from fleeing the Malaysian stock market in 1998. In February 1999. the Government shifted to imposing up to a 30% exit tax depending on the length of time the funds had been in Malaysia. In September 1999, the exit tax was changed to a flat 10% regardless of time invested. In October 2000, the Government announced that only profit repatriated within one year would be taxed effective February 1, 2001, and that there would be no more exit tax beginning on May 2, 2001 (Nikkei Weekly, 2001).

Environmental Issues

After the conservation group had failed in an attempt to turn mining ponds in Malim Nawar, near Ipoh in Perak, into a nature reserve in 1999. the Malaysian Nature Society (MNS) submitted a proposal to Perak State government in September 2000 for converting a tract of old tin mining land in Batu Gajah, Perak, into a recreation-and-conservation site, which would be called Kinta Park. A technical committee, which comprised the Land and Mines Department, the Drainage and Irrigation Department, the National Parks, the Wildlife Protection Department, and the MNS, had been created to work out the details of the park plan. The Perak State government had allocated about SI67,000 to develop basic facilities for the first year. Under the MNS plan, the park activities may include birdwatching, wildlife watching, nature photography, angling, boating, trekking, scientific research, and nature education. The area’s tin-mining heritage would also be promoted (Malaysia Tin Bulletin, 2001c).

In October 2001, LSK Enterprise Sdn. Bhd., which was the owner and operator of a tin-tailings Amang (retreatment) plant at Jalan Gopeng in Simpang Puali, Perak, was fined a total of S22.400 on two counts of dealing in radioactive tin slag without a licence from the Atomic Energy Licensing Board. The company was fined SI3.200 on pleading guilty under Section 16 (5) of the Atomic Energy Licence act of 1984 in dealing in 98 gunny sacks of radioactive tin slag without a licence from the board. The company also was fined SI9,200 on a second charge of unlawfully dealing in three gunny sacks of tin slag at the same factory premises 2 days later (Malaysian Tin Bulletin, 2001c).


In 2001. Malaysia’s minerals production included barite, bauxite, coal, dolomite, feldspar, gold, ilmenite, iron ore, kaolin, limestone, mica, monazite, natural gas, crude petroleum, sand and gravel, silica, struverite, tin, and zircon concentrate. Production of struverite increased sharply in 2000 and 2001 because of increased world demand for the raw material for the production of tantalum metal products, while production of tin decreased because of lower tin prices in the Kuala Lumpur Tin Market (KLTM). Malaysia ceased copper production at the Mamut Mine in Sabah in 1999. As a result, there had been no silver production as byproduct of copper mining since 2000, but a very small quantity of silver was produced as byproduct of gold mining in the State of Pahang in 2000 and 2001. Production of coal increased substantially in 2001 owing to increased demand by the cement industry. Production of processed mineral products included cement, refined gold, liquefied natural gas (LNG), nitrogen fertilizer materials (ammonia and urea), refined lead (secondary), refined petroleum products, crude steel, titanium dioxide pigment, and refined tin (table 1).


According to the Department of Statistics [Malaysia], total exports decreased by 10.4% to S88 billion, and total imports decreased by 9.9% to S74 billion in 2001. Malaysia’s merchandise trade surplus shrank by 13.1% to S14 billion because of a substantial decline in exports in 2001 (Ministry of International Trade and Industry, 2002b§). Malaysia remained a net exporter of minerals in 2001 because of its large exports of hydrocarbons in the form of LNG, crude petroleum, and refined petroleum products. In 2001, minerals exports totaled S8.5 billion and accounted for 9.7% of total exports. Minerals imports totaled S4.0 billion and accounted for 5.4% of total imports. Malaysia had a minerals trade surplus of S4.5 billion in 2001.

Among the major mineral exports, crude petroleum was valued at S2.9 billion; LNG, S3.0 billion; refined petroleum products, S2.0 billion; and other mineral products, S566 million. Among the major mineral imports, refined petroleum products were valued at SI.8 billion; crude petroleum, SI.6 billion; metal ore and scrap, S206 million; crude minerals, SI67 million; and other mineral products, S215 million (Ministry of International Trade and Industry, 2002a§).

Structure of the Mineral Industry

Malaysia’s mining industry consisted of a small sector of coal and nonferrous metals mining, a small mineral-processing sector of ferrous and nonferrous metals, and a large mining and processing sector of industrial minerals and oil and gas. With the exception of oil and gas. mining and mineral-processing businesses were owned and operated by private companies incorporated in Malaysia. Oil and gas exploration and exploitation businesses were owned and operated by the state-owned oil and gas company and by joint ventures of the state-owned oil and gas company and foreign companies. According to the Department of Statistics [Malaysia], as of June 2001, the total number of persons employed by the mining and quarrying industries was estimated to be 19,700, or about 0.2% of the total employed labor force of about 9.8 million (Department of Statistics [Malaysia], 2002, p. 138). The structure of the mineral industry remained relatively unchanged.

Commodity Review


Aluminum and Bauxite.—Johore Mining and Stevedoring Co. Sdn. Bhd. (JMSC) at Teluk Rumania and Lembaga Kemajuan Johor Tenggara at Sungai Rengit each operated a bauxite mine in Johor with a total workforce of 68 (Department of Statistics [Malaysia], 2002. p. 47). Bauxite production declined sharply in 2001. All bauxite ore was delivered to JMSC’s processing plant at Bukit Raja, near Sungai Rengit, for crushing, screening, and washing. Cement-grade bauxite was sold to the domestic cement manufacturers, and chemical- and refractory-grade bauxite were exported to Taiwan. Thailand, the United States, and Vietnam.

The 1999 proposal of Comalco Aluminium Co. Ltd. of Australia to build a 1.5-milIion-metric- ton-per-year (Mt/yr) alumina refinery at Similajau near Bintulu, Sarawak, had not materialized. Comalco Aluminium had decided to build the 1.5-Mt/yr alumina refinery at Gladstone in central Queensland, Australia, following the conclusions of feasibility studies, which had been completed in October 2000 (Metal Bulletin, 2002).

The 2000 proposal to build a 500,000 metric-ton-per-year (t/yr) aluminum smelter in the District of Manjung, Perak, by Charus Development Corp. of the United States had been approved by the joint-venture partners in 2001 and was expected to commence groundbreaking work in 2002. The proposed joint-venture aluminum smelter, which would be called Malaysia Aluminium Smelting Co., would be owned by Charus Development (20%), a group of investors from Hong Kong (18%), the State Development Corp. of Perak (15%), and other investors (47%) (Metal Bulletin, 2001b). The groundbreaking work, however, would not take place until a report was completed by the local environmental authorities concerning pollution at the proposed smelter site and the availability of low-rate electricity was secured for the project from the power supplier—Tenaga N’asional Berhad (Metal Bulletin, 2001a).

Gold.—In 2001, about 85% of the gold production was from the Penjom Mine in Pahang, and 15% was from two alluvial gold mines in Pahang and four in Kelantan in the central belt of peninsula Malaysia. There was no gold production from the Bau area of Sarawak in 2001.

Avocet Mining PLC operated the Penjom gold mine at Ampang Jaleh near Kuala Lipis through Specific Resources Sdn. Bhd., which was its subsidiary. In 2001, the gold production from the Penjom Mine was lower than the 3,387 kilograms (kg) produced in 2000. According to Avocet Mining, based on the classification guideline set out in the 1999 Australian Code for Reporting of Mineral Resources and Ore Reserves, Penjom’s total mineral resources, as of October 1, 2001, were estimated to be 5.2 million metric tons (Mt) at a grade of 4.69 grams per metric ton (g/t) gold, of which 2.1 Mt was measured reserves at a grade of 5.56 g/t gold; 1.3 Mt, indicated reserves at a grade of 4.32 g/t; 1.3 Mt, inferred reserves at grade of 4.36 g/t gold; and 503,000 t, ore stockpile at a grade of 2.9 g/t gold. Penjom in-pit resources, as of October 1, 2001, were estimated to be 1.99 Mt at a grade of 6.22 g/t, of which 1.03 Mt was measured reserves at a grade of 7.10 g/t; 384,200 t, indicated reserves at a grade of 6.02 g/t; 314,7001, inferred reserves, at a grade of 5.30 g/t: and 260,900 t, ore stockpile at a grade of 4.09 g/t (Avocet Mining PLC, 2002§).

According to a local press report, three new gold deposits were discovered in the Districts of Besut, Kemaman, and Setiu in Terengganu. The state Government planned to carry out gold mining activities in the areas if feasibility studies showed economic potential for gold mining. In June 2001, the state Government reopened the Lubuk Mandt area in Marang, which is south of Kuala Terengganu, to the public for gold mining. The gold mining area was closed following a mine accident in 1987, which claimed 12 lives (Star, 2001).

Lead.—Metal Reclamation (Industries) Sdn. Bhd., which was Malaysia’s sole lead smelter, operated a secondary (recycling) lead smelter at Taman Selayang in Selangor. In late 2000. the company brought onstream a new secondary lead smelter at Pulau Indah Industrial Park on Pulau (island) Lumut, which is southwest off Port Klang, and began operations in early 2001. The new secondary lead smelter, which used the V1IM Isasmelt technology, has a production capacity of 60,000 t/yr. According to a company official, the total secondary lead production was expected to reach between 40,000 and 50,000 metric tons (t) in 2001. The old smelter would be closed once the new smelter’s operation reached full capacity in early 2002. The company produced antimonial lead and planned to produce pure lead and calcium lead strips with new equipment in the future (Metal Bulletin, 2001e).

Iron and Steel.—Production of iron ore increased in 2001 because of an increase in the number of operating mines in the State of Pahang. In 2001, iron ore was produced from between three to six small-scale mines in the States of Pahang. Perak, and Terengganu with a total workforce of about 80 (Department of Statistics [Malaysia], 2002. p. 46). To meet the raw material requirements for production of direct-reduced iron, hot-briquetted iron (DRI/HBI), Malaysia imported about 1.7 Mt of iron ore mainly from Bahrain. Brazil, and Chile in 2001. Production of DRI/HBI was by Amsteel Mills Sdn. Bhd. with the capacity of 800,000 t/yr on Labuan Island off Sabah and by Perwaja Steel Sdn. Bhd. with the capacity of 1.2 Mt. yr in Kemaman, Terengganu.

Production of crude steel increased to 4.1 Mt in 2001 from 3.7 Mt in 2000 because of increased demand for construction steels by the construction industry for the country’s major infrastructure projects. Malaysia imported about 5.1 Mt of iron and steel products mainly from Japan and other major Asian steel-producing countries to meet its domestic demand (Southeast Asia Iron and Steel Institute, 2001 §).

According to the Malaysian Iron and Steel Industry Federation (MISIF), it would take 2 to 3 years for Malaysia’s aggregate apparent steel consumption to return to or surpass the pre-financial-crisis-high of 8.3 Mt in 1997. The MISIF estimated that the aggregate apparent steel consumption increased by 13% to 6.9 Mt in 2000 from 6.1 Mt in 1999. Of the total apparent steel consumption in 2000, 3.0 Mt was finished long products, such as bars and wire rods used by the construction industry, and 3.8 Mt, plate products, such as coil and plate used by the manufacturing industry. The estimated apparent steel consumption per capita was 294 kg in 2000 compared with 267 kg in 1999 (Malaysian Iron and Steel Federation, 2001 §)

The state-owned Perwaja Steel, which continued to suffer losses, was operating below capacity in 2001. To resolve the financial problems of the company, the Government revealed that it prefers privatization of Perwaja Steel rather than closing down the plant or injecting more capital to revive and modernize its DRI plant and electric arc furnace steelmaking facilities in Kemaman, Terengganu, and in Gurun, Kedah, if it could attract enough interest. In another development, the Swiss Government had agreed to assist Malaysia’s anticorruption agency to investigate the alleged embezzlement of Perwaja Steel funds, which were being siphoned off to a Swiss bank through Japan and Hong Kong (Metal Bulletin, 2000c).

To be more competitive with the low-priced imports in domestic and overseas markets, Malaysia’s steel industry began its consolidation in 2000 and 2001. Ann Joo Resources Bhd., which owned of Anshin Steel Industries Sdn. Bhd., acquired 30.04% of Malayawata Steel Bhd. and took over its management in August 2000. Lion Land Bhd., through its 99% owned subsidiary, Amsteel Mills Sdn. Bhd., signed an agreement with the state-owned Johor Corp. to acquire Antara Steel Mills Sdn. Bhd. for about S28.5 million in February 2001 (Metal Bulletin. 200Id).

Struvcritc.—Production of struverite, which was produced by tin-tailings Amang (retreatment) plants mainly in the State of Perak, reached a historic high in 2001. The 2001 production level was about 10 times that of 2000. Beh Minerals Sdn. Bhd. in Lahat, Perak, and Syarikat Penderong Sdn. Bhd. in Kuala Dipang, Perak, remained the two major producers of struverite in 2001. According to the Minerals and Geoscience Department [Malaysia], the average metal content of columbium and tantalum in struverite is below 2%. All struverite produced in Malaysia was exported to China (Minerals and Geoscience Department’s written commun., 2002). Malaysia Smelting Corp. also produced tin slags, which contain tantalum, from its tin smelter in Butterworth, Penang.

In July, the Penang Island Municipal Council, which is the owner of Malaysia’s oldest city stadium in Georgetown, Penang, announced that tantalum-bearing minerals worth several million Malaysian ringgit (MS) were discovered underneath the stadium. The citv council had called for interested parties to prospect and mine out the minerals before renovation work can be started on the stadium (Malaysian Tin Bulletin, 2001a).

Tin.—Tin mine production, for the first time in Malaysia’s tin mining history, dropped to below the 5,000 t level in 2001. The decline in tin production was owing to lower tin prices and depleted high-grade ore reserves. The average tin prices in the KLTM during 2001 decreased to S3.64 per kilogram in October from S5.14 per kilogram in January. According to the Minerals and Geoscience Department [Malaysia], The number of operating mines in 2001 ranged from 37 in October to 46 in May, and the number of tin miners in 2001 ranged from 1,461 in December to 1,764 in July. In 2001, tin produced by gravel pump accounted for 41.9%; open cast, 29.9%; panning, 10.3%; dredging, 6.3%; Amang (retreatment) plant, 11.2%; and underground, 0.4% (Minerals and Geoscience Department, 2001b, p. 9).

To revitalize the tin mining industry, the Malaysian Chamber of Mines (MCM) had recommended to the State government of Perak, which is a major tin-mining State, to change the existing royalty rate to a flat rate without any benchmarking to the prevailing price level. Under the existing formula, the Perak State government collects royalties solely on tin priced at S5.25 per kilogram (MS 20 per kilogram) and above. In its 2000 annua! report, the V1CV1 stressed that the flat tin royalty rate would provide the necessary impetus for the tin mining industry and would generate more revenues for the Perak State government (Metal Bulletin, 200lg).

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