WHAT COULD POSSIBLY GO WRONG? EVERYTHING

THE IDEA OF MAHATHIR PROVIDING ‘SOLUTIONS’ FOR AN AUSTRALIAN COMPANY AND AUSTRALIAN INVESTORS TAKES A BIT OF GETTING ‘USED TO’

DOES the board of directors of Wesfarmers really understand what murky and complicated waters managing director Rob Scott is taking the company into with its $1.5 billion bid for the Australian and Malaysian rare earths producer Lynas Corporation? Those four words – Australian, Malaysian and rare earths – summarise the complications. The “stuff” is dug up in Western Australia. But it is processed in Malaysia. The alloys from rare earths are a critical component of rechargeable batteries, catalytic converters, magnets (especially for Bill Shorten’s electric cars) and quite a bit more. That is to say, we can’t live without them – the rare earths, not the EVs, that is. And as of right now, Lynas has the only major source of product outside China – the Japanese in particular are, shall we say, anxious customers – making it and its resource just a tad strategically important. Oh yes, there’s a fifth word which brings it all together: radioactive. The process throws off a lot, and I mean a lot, of radioactive waste. But don’t worry, are the soothing words proffered by assorted folks, it’s very low-level radioactivity. Gee, that’s so soothing, I’m surprised Lynas hasn’t embarked on a sideline to add it to consumer products like clothes and crockery and pretty much everything else. So that, you know, the soft glow would enable you to find things in the dark when the lights go out after we close down all our remaining coal-fired power stations. But ahead of that, Lynas has a problem. The waste has been piling up in Malaysia. And Malaysia – gee, this is a big surprise – has told Lynas to take it away. All, up to this point, 450,000 tonnes of it: you know, very, very low-level, nothing-to-see-here, radioactive waste. Hmm, well it appears Scott believes Wesfarmers has the magic solution. So far as future waste is concerned, a Wesfarmersowned Lynas would do the preliminary processing in WA, thereby keeping that waste at home.

Wesfarmers wants to revive the idea of a processing plant at Northam, around 100km east of Perth – west would have, I would have thought, been even better; although true, that soft glow on the eastern horizon, day and night, could be attractive. Further, once Wesfarmers concluded a three-way deal – taking over Lynas and forging an agreement with Malaysia to keep the final processing over there – it would bring all that existing stuff home as well. It – old and new – would all go into an ancient clay bed, somewhere in WA. Heck, there’s a lot of territory to choose from. I’m sure there’s not a single person in Australia who’d object to any of that: radioactive stuff 100km from Perth and then being reburied. Why, just take the Greens. No, I won’t make that old joke – please. No, no, of course not. The Greens are the very model of 21st century reason and logic. Surely, the single-best contribution Australia could make to flooding the world with EVs would be to cop the – to stress, very, very low level – radioactive waste that is an unavoidable by-product of making the batteries without which those EVs couldn’t drive one kilometre, far less 300. Now add some further soothing words, courtesy of our national financial daily, The Fin, that on Friday Malaysia’s PM emerged from a cabinet meeting with a “solution” to this whole, pardon the expression, radioactive processing issue. That “solution” was essentially: keep it in Australia/take it back to Australia. I need to introduce a “sixth” and “seventh” word to explain further the complications. That Malaysian PM happens to be someone named “Mahathir Mohamad” – who at age 92 made the most spectacular comeback we have ever seen in democratic politics. Anywhere. Ever. After retiring in 2003 – after 22 years as PM – he won re-election in 2017. Now pushing 94, he’s promised to stand aside for his deputy-turned enemyturned deputy again, Anwar Ibrahim. But I’m not holding my breath (and nor, should Anwar). That’s for Malaysia and Malaysians. What’s relevant for Wesfarmers and Lynas and their shareholders, is that Mahathir is not exactly a big fan of Australians. The idea of him providing “solutions” for an Australian company and Australian investors takes a bit of getting “used to”. So to sum up. Lynas’s key plant is in Malaysia, the PM of which is not a big fan of Australia. The country and the plant are literally at the geocentre of the biggest geopolitical contest in the world today – between the US and China, focused on the south China sea. It produces two things – a product with huge geopolitical relevance and a lot of radioactive waste. Sorry, low-level waste. Hey, there’s another idea: instead of bringing it back to WA, maybe they could persuade the Chinese to use it as landfill in those new islands they’re building in the South China sea – so they’d be like a living lighthouse to ensure no one bumped into them, as they are all sort of new and that. Now I really do think all this should be a breeze for the board and management of Wesfarmers. But if they really do need some expert help with schmoozing Mahathir & Co, but especially Mahathir, they could call on former PM Paul Keating. That’s assuming of course Paul wasn’t recalcitrant.