Singapore 06/01/2016 - Malaysia has imposed a three-month ban on bauxite mining in Peninsular Malaysia’s largest state of Pahang effective January 15.
The measure - announced at a press conference in Kuala Lumpur on Wednesday afternoon local time - comes after residents in the state capital town Kuantan complained of environmental pollution, following rampant legal and illegal mining.
Malaysia's Minister for Natural Resources and Environment Wan Junaidi Tuanku Jaafar said the aim of the measure is not to shut down bauxite mining altogether, but to control it, and then regulate the number of approved permits issued to miners in the future, reported Singapore’s Channel NewsAsia.
As of last week, the ministry had stopped issuing approved permits to mining companies, it said.
Media reports were, however, conflicting on the export of bauxite from Pahang, with the local Malay Mail reporting that exports will be banned for three months starting January 15, while Reuters reported that the moratorium is placed on new bauxite export permits.
Corporate communication officials at Malaysia’s Ministry of Natural Resources and Environment were unavailable for further comment.
There is no breakdown on bauxite exports by Malaysian states, but the local media New Straits Times reported that Kuantan exports some 3.5 million tonnes of bauxite per month.
Malaysia is one of the largest suppliers of bauxite to China after Indonesia banned the export of unprocessed ore in 2014.
China imported 20.5 million tonnes of bauxite from Malaysia in January-November 2015, which accounted for 42 percent of its total imports during the period.
Chinese market participants had downplayed the effect of Malaysia’s bauxite mining ban on the Chinese alumina and aluminium industry, mainly because the country can also purchase bauxite from other suppliers, like Australia and India.
In the first 11 months of last year, China imported 17.55 million tonnes and 6.8 million tonnes of bauxite from Australia and India respectively. Both countries are China’s second and third largest suppliers of bauxite respectively.
Sources also noted of high bauxite inventory in China - with a Shanghai-based aluminium analyst estimating stocks at six-month’s worth - and slow demand for bauxite, due to production cuts and sluggish demand in the Chinese alumina and aluminium industries.
(Editing by Martin Hayes)