ARTICLE: Malaysia has huge untapped mineral resources

UNKNOWN to many, Malaysia has huge coal reserves that can be fully tapped as an additional source of energy to lessen the burden of domestic industries currently saddled with increasingly high energy costs from gas and electricity.

According to the Mineral and Geoscience Department, the country’s coal resources are estimated at 1.72 billion tonnes, of which 274 million were measured, 347 million indicated and the balance 1.1 billion inferred.

In Sarawak and Sabah alone, coal reserves are estimated to have an in situ value of 300 million tonnes worth over RM150bil.

With such huge untapped reserves in our own backyard, it is sad to see why Malaysia still needs to import most of its coal from China, Indonesia and Australia to support, among others, the local power generation, cement, iron and steel plants.

Given its status as a strategic mineral, perhaps it is timely for the Government and private sectors to consider the development of full-scale coal mining in Malaysia that will truly benefit the local industries.

By 2010, Malaysia’s demand for coal is expected to reach 19 million tonnes, according to the Malaysian Chamber of Mines, which champions the cause of the local mining sector.

While there is a need to prioritise coal mining to reduce the country’s ever increasing energy costs, mining of other mineral resources such as gold, tin, nickel, bauxite and limestone should not be neglected.

In fact, the launching of the Second National Mineral Policy last week by the Government can be considered as a “green light” towards revitalising the country’s lacklustre mineral industry as well as encouraging existing and potential “mining” investors alike to venture into mineral resource prospecting and exploration.

Despite the current depressed global mineral and metal prices, the introduction of the new mineral policy can be considered as timely as it will re-position the local mining industry to remain operationally viable in today’s challenging global environment.

Malaysia’s gold, tin, coal, nickel, limestone and bauxite reserves are estimated at RM235bil, all of which are waiting to be fully tapped.

Tin reserves are estimated at RM30bil, copper RM7.5bil, gold RM3.5bil and limestone RM105bil.

Given the dynamic prospect of the mineral sector, it will be wise for the Government to put extra effort into “zoning” the prospective and high mineral concentration areas for the private sector to undertake extensive mineral exploration and mining activities.

The mineral industry should also be designated as a promoted industry and granted double tax deduction on exploration.

The expenditure incurred by mining companies undertaking rehabilitation of ex-mining land should also be offset against income or revenue generated by companies within the same group.

It is good to note that the Government has taken the initiative to protect the environment under the new mineral policy.

Smaller mining companies must set aside 1% of their total production to a consolidated fund together with the state government, while the bigger ones would have their individual funds based on 1% of total production.

Source: biz.thestar.com.my

Commodities Talk - By Hanim Adnan; Hanim Adnan is assistant news editor at The Star. Hailing from Ipoh, she bears witness to many abandoned tin mining areas being converted into lucrative housing development projects.