September 7, 2016 / 6:20 AM / in a year

UPDATE 1-Malaysia extends bauxite mining ban until year-end

* Malaysia extends moratorium to Dec. 31, fom Sept. 14

* Says may extend moratorium if stocks not cleared by year end (Adds comment, detail, background)

KUALA LUMPUR, Sept 7 (Reuters) - Malaysia extended a moratorium on bauxite mining to the end of the year, from Sept. 14, and said the government could stretch the ban by another six months if the current high stockpiles of the aluminium-making commodity were not cleared by Dec. 31.

Malaysia’s largely unregulated bauxite mining industry has boomed in the past two years to meet demand from top aluminium producer China, filling in a supply gap after Indonesia banned exports. But the frenetic pace of digging has led to a public outcry with many complaining of water contamination and destruction of the environment.

Late last year, bauxite mining was blamed for turning the waters and seas red near Kuantan, the capital of Malaysia’s third-largest state and key bauxite producer Pahang, following which, in January, the government imposed its first three-month ban on mining the commodity.

Despite extensions to the moratorium, 4.13 million tonnes of stockpiles remain uncleared in three sites around Kuantan, Malaysia’s environment minister said on Wednesday.

“If come Dec. 31 and the stockpiles are not cleared, I‘m going to ask for (another) six months moratorium,” Wan Junaidi Tuanku Jaafar, Malaysia’s natural resources and environment minister, said at a press conference.

China imported nearly 24 million tonnes of bauxite from Malaysia last year, its top supplier then. But Malaysia’s bauxite exports to China have slipped since the moratorium, falling to 5.4 million tonnes over January to July, or only about half of the volumes shipped a year ago.

The extended mining ban will give industry players and authorities time to comply with improved regulations and take steps to mitigate pollution across the mining and export supply chain, the environment ministry said in a statement. (Reporting by Liz Lee, Writing by Emily Chow; Editing by Himani Sarkar)

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