Malaysia bauxite - from bans to arrests

Bloomberg has today run a story that 4 government officials in Pahang state in Malaysia have been detailed on corruption charges.

This news follows the announcement on Wednesday of a 3-month moratorium on the mining of bauxite in Kuantan. Kuantan is the capital of Malaysia’s Pahang state.

Bloomberg says the detained officials were from the Land Office. They were suspected of taking bribes from unlicensed miners. Bloomberg quoted the agency as saying it “has received many complaints on environmental pollution from uncontrolled bauxite mining activities” and that it won’t hesitate “to take action against those found involved in corruption or misuse of power.”

As we have previously reported on this blog, the mining scene in Kuantan has deteriorated over time, due to the rampant levels of illegal mining and trucking. To mine bauxite, companies are meant to have a mining licence, and an export licence to send the ore overseas. But some estimates put the number of fully-licensed companies as being as low as only 10-20% of the total. Malaysia’s central government got involved in December, leading to the ban.

The anti-corruption commission said that the corrupt officials were selling trucking permits for as much as 200% of the face value of the permit.

It is good to see some controls and discipline being brought to bear in Malaysia, but the longer-term problem is that new reserves are not being discovered or developed. The Malaysia Natural Resources and Environment Minister has said that new controls will be enforced once the 3 months expires, so some sort of order might be achieved. But without new seams being developed, Malaysia will still dry up within 3 years.