Web alert: Malaysia halts bauxite mining operations

News & Insights 21 January 2016


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The club understands that Malaysian authorities have temporarily suspended bauxite mining for a period of three months from mid-January 2016.

The club understands that Malaysian authorities have temporarily suspended bauxite mining for a period of three months from mid-January 2016.  This follows a period of significant mining activities for bauxite, especially in the Malaysian east coast state of Pahang, over recent years. 
 
The primary reason for the suspension appears to be due to concerns over the environmental impact of mining bauxite.  We understand that there are also concerns in relation to a lack of a comprehensive and robust regulatory regime on mining activities in region.  We are advised that relevant authorities in Malaysia have decided to put into place licensing and environmental protection regulations and that, once established, mining companies in Malaysia may not be able to operate unless provided with Approved Permits. During the period of suspension the Marine Department and Kuantan Port will monitor sea transportation activities whereby only existing cargo in approved stockpiles and in the port area will be allowed to be shipped out.
 
Malaysia has recently been a major exporter to China of bauxite, especially following Indonesia’s decision to halt the exportation of the unprocessed ore in 2014.  It is anticipated that other countries including Vietnam and Guinea may bridge the gap in the supply chain.
 
The club has been informed that the Malaysian authorities, together with the assistance of the IMO, will continue working on a plan for a national workshop implementation of IMSBC Code.
 
The club will continue to monitor the situation and provide further updates as they develop.

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