مالزی ایران

malaysiairan.com

                               

 

 

   

 

The Mineral Industry of Malaysia

Malaysia's economy was dependent on exports of manufactured goods and on the service sector. The slow economic recovery in the United States and Europe affected the Malaysian economy, which grew at a moderate pace in 2013. The country's real gross domestic product (GDP) increased by 4.7% in 2013 compared with an increase of 5.6% in 2012. Malaysia's economic growth continued to be a result of increased domestic demand (business and household spending). Private investment increased by 13.6% and accounted for the major share of the growth in the GDP. Public investment increased by 0.7% in 2013 compared with a decrease in 2012 that resulted from an increase in spending on the energy and transportation sectors. The manufacturing sector grew by only 3.4%, as demand remained weak for manufactured products in most of the industrialized countries in the Western Hemisphere. The rate of growth of the construction sector increased by 10.9% as a result of the Government startup of several infrastructure projects in 2012. The output value of the mining and quarrying sector increased by 0.5% compared with 1.4% in 2012, reflecting a decrease in the production of crude oil and condensate (Bank Negara Malaysia, 2014, p. 10−20).

Minerals in the National Economy

Malaysia has identified mineral resources of barite, bauxite, clays, coal, copper, gold, ilmenite, iron ore, limestone, monazite, natural gas, petroleum, silica, silver, struverite (tantalum), tin, and zircon. During the 20th century, mineral production played an important role in Malaysia's national economy; after many years of exploitation, however, such minerals as barite, copper, ilmenite, and tin were either depleted or the capacities to produce them had decreased significantly. In terms of its contribution to the country's economy, the mining and quarrying sector accounted for 8.1% of the GDP and about 95,200 individuals were employed in this sector (Bank Negara Malaysia, 2014, p. A1; Department of Statistics, 2014a, p. 28).

 

Government Policies and Programs

In Malaysia, mineral sector activity is governed by the Mineral Development Act 1994 and the State Mineral Enactment. The Mineral Development Act 1994 defines the power of the Federal Government to regulate mineral exploration, mining, and related activities, including the authority to conduct inspections. The State Mineral Enactment gives the States the power to issue mineral prospecting and exploration licenses and mining leases. Apart from paying a corporate tax to the Federal Government, mine and quarry operators are required to pay value-based royalties to the State in which their operation is located. Royalty rates depend on the mineral commodity and on the assessment of each of the individual States. The Government amended the Safeguard Act 2006 (Act 657) in 2012, and it took effect on September 1, 2013.

 

Metals

Aluminum.—Malaysia did not have an aluminum refinery, and most of its bauxite output was exported to other Asian countries. Press Metal Sarawak Sdn Bhd (a subsidiary of Press Metal Berhad) completed the construction of a 120,000-metric-ton-per-year (t/yr) aluminum smelter in Mukah in the State of Sarawak; the smelter was fully operational by the second half of 2012. The company's second smelter, which had a capacity of 320,000 t/yr and was located at Samalaju in the State of Sarawak, was fully operational in late 2013. On June 27, 2013, a statewide power outage caused significant damage to the smelter in Mukah. The production pots were solidified and the operation was forced to shut down for about 5 months to repair the damage. Japanese trading company, Sumitomo Corp., agreed to invest an additional $140 million in Press Metal's aluminum operations and held a 20% share in both smelters. Press Metal planned to produce about 410,000 metric tons (t) and 435,000 t of aluminum in 2014 and 2015, respectively (China Metal Bulletin, 2013b; Press Metal Berhad, 2014, p. 7).
Gulf International Investment Group (GIIG) Holdings Sdn Bhd and Aluminum Corporation of China [parent company of Aluminum Corp. of China Co. Ltd. (Chalco)] signed an agreement to jointly develop an aluminum smelter in Samalaju Industrial Park at Bintulu in the State of Sarawak. The joint-venture company, Smelter Asia Sdn Bhd, would have the following three shareholders: Chalco, GIIG Holdings, and a Sarawak company. The partners signed an electricity supply agreement with Sarawak Energy Bhd, which would operate the Bakun hydroelectric plant. The initial output capacity of the smelter was planned to be 370,000 t/yr, but the partners could increase the output capacity to 700,000 t/yr if enough electricity could be supplied to the plant. Construction of the $1.6 billion smelter was scheduled to begin in the second half of 2012, and the smelter would be put into operation in 2015. In 2013, Chalco decided to suspend its participation because of the lack of progress in finalizing the agreement (China Metal Bulletin, 2013a).


Copper.—Without any refined copper production, Malaysia relied on imported copper to meet its demand. In 2012 (the latest year for which data were available), Malaysia imported 215,041 t of refined copper and copper alloys and 13,523 t of copper scrap and exported 1,410 t of refined copper and copper alloys and 17,498 t of copper scrap. Malaysia also imported 175 t and exported 2,066 t of copper concentrates in 2012. Because Malaysia does not produce copper concentrates, its exports of copper concentrates might be transshipments from other countries; Singapore was the main destination for Malaysia's exports. In 2012, Monument Mining Ltd. of Canada, through its Malaysian subsidiary Monument Mengapur Sdn Bhd, acquired a 100% interest in the Mengapur polymetallic mine. In 2013, the company continued with evaluation work on the mine and planned to complete a resource report, which would include a preliminary economic assessment study, in 2014 (Minerals and Geoscience Department, 2013, p. 19–23; Monument Mining Ltd., 2013a, p. 2).

China Steel invested $62.5 million to secure a 19% share of the joint-venture project and to obtain between 30,000 and 32,000 t/yr of ferromanganese alloys. Sumitomo held about a 25% to 30% share in the joint venture. The remainder was held by South Africa-based companies. Construction of the plant was scheduled to start in 2014, and production was expected to begin in 2016 (Southeast Asia Iron and Steel Institute, 2013).
OM Mineral (Sarawak) Sdn Bhd, which was a joint venture between OM Holding Ltd. of Australia (80%) and Cahaya Mata Sarawak Bhd (20%), planned to build a ferroalloys plant in Samalaju Industrial Park at Bintulu in the State of Sarawak. The plant was designed to produce 308,000 t/yr of ferrosilicon in phase one and 300,000 t/yr of manganese alloy in phase two. The construction of phase one started in the second quarter of 2013, and the plant was expected to be put into operation in the third quarter of 2014. OM Mineral signed a power supply agreement with Sarawak Energy Berhad for 20 years. The cost of the phase 1 project was estimated to be $400 million (OM Holdings Ltd., 2014, p 4).


Tin.—Malaysia's tin mines produced about 3,500 t/yr during the past several years. Resources were depleted and ore grades were lower after more than 100 years of active mining operations. The country imported tin concentrates from other countries in Asia and Africa to meet its demand. Solder production was the leading tin consuming sector in Malaysia, followed by tinplate and pewter. Tin consumption in Malaysia decreased to less than 3,000 t/yr during the past 3 years. The decrease in tin consumption was mainly the result of a decrease in demand from the solder and pewter sectors; consumption by other consumers remained at the same level during that period. Malaysia Smelting Corp. Bhd. (MSC) was Malaysia's sole integrated tin producer; it produced 32,668 t of refined tin at its Butterworth smelter in 2013, which was about 13% less than the volume it produced in 2012. MSC continued to expand its sources of tin concentrates from major tin-producing countries in the world. In 2013, Malaysia imported 30,274 t of tin concentrates compared with 26,536 t in 2012. The decrease in tin production was the result of MSC's inability to source crude tin metal for refining into high-grade tin metal and the decrease of profit margins on refining. Malaysia's refined tin exports decreased to 36,365 t in 2013 from 37,191 t in 2012 and went mainly to China, Japan, the Republic of Korea, Singapore, and Taiwan. MSC tried to extend the contract of work (CoW) with the Indonesian Government for its subsidiary PT Koba Tin; however, the attempt to extend the CoW was unsuccessful. As a result, MSC decided to shut down all mining operations in Indonesia in 2013 (Department of Statistics, 2014b, p, 26, p. 33; Malaysian Tin Bulletin, 2013; Malaysia Smelting Corp. Bhd., 2014, p. 20).
Through its subsidiary Rahman Hydraulic Tin Sdn. Bhd. (RHT), MSC acquired an 80% stake (valued at $152,000) in SL Tin Sdn Bhd from Dayang-Dayang Sdn Bhd. SL Tin held a 15-year mining lease at Sungei Lembing in the State of Pahang, and RHT would explore tin resources at the 267-hectare lease area. Sungei Lembing had been one of Malaysia's major tin-mining areas in the 1980s (Kettie, 2014).

produced from the areas of Bintulu, Merit-Pila, Silantek, and Tutoh in the State of Sarawak. The country has coal resources of about 1.9 billion metric tons (Gt), of which 281 Mt was measured, 378 Mt was indicated, and 1.3 Gt was inferred. About 1.5 Gt of the country's coal resource is located in Sarawak, and more than 300 Mt is located in Sabah. Owing to the lack of infrastructure, most of the coal in the interior areas of the country had not been exploited. Coal resources located in Sabah were in the Maliau Basin Conservation area, which the Government had designated as a protected area (Minerals and Geoscience Department [Malaysia], 2013, p. 106).
Natural Gas and Petroleum.—Malaysia remained a net exporter of natural gas and crude oil. The increase in natural gas production was a result of the growth in external demand for LNG from China and Japan. The Malaysian Government offered incentives for companies to explore deeper and less-profitable fields in a bid to increase reserves as energy demand increases. Twelve new fields were brought onstream in 2013, which included the Berantai field in Peninsular Malaysia and the Gumusut-Kakap and Kanowit deepwater fields in Sarawak (Petroliam Nasional Berhad, 2014, p. 45–49).

Production
Malaysia produced bauxite, coal, feldspar, gold, ilmenite, iron ore, mica, natural gas, petroleum, struverite (tantalum), tin, and zircon. Malaysia had been one of the major tin-producing countries in the world; owing to depleted reserves and lower ore grades, however, tin concentrate production had decreased during the past decade. The country depended on imported tin concentrates and crude tin mainly from Australia and Indonesia to meet its demand for feedstocks for its smelter and refinery. In 2013, production of such commodities as manganese increased whereas production of feldspar, iron ore, kaolin, rutile, and zirconium decreased by more than 10% (table 1).


Structure of the Mineral Industry
Malaysia's mineral industry consisted of a small mining sector for coal and ferrous and nonferrous metals. Metallic and nonmetallic mineral processing facilities were operated by private companies incorporated in Malaysia. Oil and gas exploration, production, and processing activities and facilities were owned and operated by Petroliam Nasional Berhad (Petronas), which was a state-owned company, and by joint ventures of Petronas and foreign companies. Foreign investors were permitted to have a 100% equity stake in companies operating in Malaysia or to form joint ventures with local companies (table 2).


Mineral Trade
Malaysia's major export products were automotive parts, chemicals, electronics, and machinery. The volume of mineral commodity exports has declined in recent years. In 2013, total trade increased to $456.3 billion; of that amount, exports increased by 2.4% to $239.9 billion and imports increased by 7.2% to $216.4 billion. Electrical and electronic products continued to be Malaysia's leading export category and accounted for 32.9% of total exports. The export share of liquefied natural gas (LNG) and petroleum products was 7.2% and 12.9%, respectively. Malaysia exported 25.2 million metric tons (Mt) of LNG, which was an increase of 8.1% from that of 2012. LNG was exported to (in descending order of export value) Japan, the Republic of Korea, and China and accounted for 91% of the country's total LNG exports in 2013. Malaysia exported 11.8 Mt of crude oil, which was a decrease of 0.4% from the value in 2012. Crude oil was exported to (in descending order of export value) Australia, India, Thailand, Japan, China, New Zealand, and the Republic of Korea, which together accounted for 93% of the country's total crude oil exports in 2013. Malaysia's major import category was machinery and transport equipment, which accounted for 39.1% of the country's total imports. China remained Malaysia's leading trading partner in 2013 followed by Singapore and Japan (Department of Statistics, 2014b, p. 1–30).

Gold.—Approximately 17 gold mines were operating in Malaysia; all were located in the States of Kelantan, Pahang, and Terengganu. More than 90% of mined gold was from the State of Pahang, mainly the Penjom gold mine at Penjom, the Selinsing gold mine in Bukit Selinsing Koyan, and Raub Australian Gold Mining Sdn. Bhd's gold mine in Raub. The Selinsing gold mine was a leading gold producer in the country and produced 1,648 kg (52,982 troy ounces) in 2013, which was an increase of about 19% from that of 2012. Monument Mining completed the expansion of its processing plant to 1 million metric tons (Mt/yr) from 400,000 t/yr in 2012. The plant processed more than 900,000 t of ore in 2013, which was about three times more than in previous years; however, the average head grade decreased to 2.07 grams per metric ton (g/t) from 3 to 4 g/t between 2010 and 2012. As a result, the production cost per troy ounce of gold increased to $400 in 2013 from $306 in 2012 (Monument Mining Ltd., 2013b).
Iron and Steel.—Malaysia's iron ore production was from small-scale mines located in the States of Johor, Pahang, Perak, and Terengganu. The low-grade iron ores were consumed by the pipe-coating industry that supplied cement plants and the oil and gas sector. The high-grade iron ore was exported to China, and the country's iron and steel producers imported their iron ore in the form of lumps and pellets and steel scrap as raw materials for steelmaking. Malaysia produced about 4.7 Mt of crude steel, which was the lowest annual output of the past 5 years. Owing to increased demand for steel products for infrastructure and housing projects, apparent steel consumption increased to about 10 Mt in 2013, which was about 1 Mt more than that of 2012. To meet the domestic demand for steel products, Malaysia imported a net of 5 Mt of steel in 2013 (Southeast Asia Iron and Steel Institute, 2014a, p. 66–69).
In February 2013, the Ministry of International Trade and Industry imposed an import tariff on 18 types of flat-steel products produced in Malaysia. Megasteel Sdn Bhd a (subsidiary of The Lion Group) subsequently asked the Malaysian Government to extend the import protections by imposing a 30% import tariff on flat-steel products for an additional 6 years. Megasteel argued that, without higher import tariffs, it would be difficult for Megasteel to secure foreign investors, which it had been seeking since 2011. Downstream steel producers, on the other hand, expressed concern about increasing import protections on any type of steel products because they feared that restricting imports would increase their costs and make their products uncompetitive on the world market (Southeast Asia Iron and Steel Institute, 2014b).


Manganese.—Malaysia's manganese resources were located in the States of Johor, Kelantan, Pahang, and Terengganu, and the manganese content was usually less than 50%. The volume of manganese output from Malaysia depended on the price of manganese in the world markets. Since 2005, with an increase in manganese prices in the world, Malaysia's manganese output had gradually increased. Without much domestic demand for manganese, the country exported nearly all its output to China. South Africa's Assmang Ltd. and African Rainbow Minerals Ltd., China Steel Corp. of Taiwan, and Sumitomo Corp. of Japan jointly formed a company, Sakura Ferroalloys Sdn Bhd, to construct a 163,000-t/yr ferromanganese plant in Sarawak.

Coal.—Malaysia's coal resources are located in the States of Perak, Perlis, Sabah, Sarawak, and Selangor, but mining and exploration for coal were conducted only in Sarawak. Coal was products will also likely increase. Several natural gas and oil projects are set to come onstream to replace maturing fields during the next several years.

Out look
Malaysia's economy is projected to grow at a slower rate during the next 3 years than in the previous several years because of the projected slow recovery of the global economy. Private and public spending, however, will likely continue to support economic growth. The Government is aware of the country's need to reduce its dependence on external markets and to produce a more diversified range of goods for export. To improve the investment climate and build a more competitive economy, the Government plans to privatize state-owned companies, sell Government land, and reassess Government subsidies. The Government plans to further relax some rules regarding foreign investment in Malaysian companies and properties, initial public offerings, and the financial sector.

Our company, Splendid Millennium Sdn Bhd can advise you on all aspects of join ventuer in Malaysia.

 

Contact us for more information

 

 

 

Copyright © 2009-2017 Malaysia Iran . All rights reserved