The Malaysian government this week abruptly threatened to shut down a brand new rare earth processing plant – a move that dramatically underscores the need for international co-ordination of rare earth mining and its valuable energy related by-product, thorium.Four Malaysian cabinet ministers said they would revoke the license of Australian mining company Lynas Corp. to process rare earth metals unless Lynas exports all “waste material” Mining.com reported.The “waste” is believed to include thorium – the mildly radioactive element that could replace uranium as a nuclear fuel and help establish safer, more efficient and less proliferation prone nuclear power.Thorium typically co-exists in rocks that also contain rare earths, the metals that are vital to the world’s economy. Manufacturers build them into missiles, radar, cars, wind turbines, iPods, mobile phones, light bulbs and many other everyday products.WASTE NOTA couple of weeks after Lynas opened its Lynas Advance Material Plant in Kuantan on Malaysia’s east coast, the government ministers joined forces to tell the company it could not keep the waste in the country, according to Mining.com.The trade publication said that Lynas had intended all along to treat and store the waste on site, and implied that Lynas was caught off guard by the government’s demand.Lynas responded in a stock exchange filing that it planned to process the waste into a “co-product” which it would either export or sell in Malaysia, Reuters reported.The story did not make clear what those “co-products” are. Advocates of thorium noted that they could not include thorium, because there’s no significant current market for the substance. A thorium nuclear movement would, of course, open new trade outlets.“Unfortunately for Lynas, there is no place to take the waste thorium,” said Jim Kennedy, president of St. Louis, Missouri- based ThREEM3, a thorium and rare earth consulting firm that also owns rights to rare earth by-products from Missouri’s Pea Ridge iron ore mine. “This is a serious problem for Lynas.”ROCK AND A HARD PLACELynas does indeed appear to literally be between a Malaysian rock and a hard place.Kennedy, with whom I corresponded via email, said the company’s predicament underscores the international need for what he calls a “Thorium Bank.”His proposed institution would oversee and store thorium gathered from rare earth processing operations. It would assume liability for thorium, which governments regulate because of its mild radioactivity. It would help assure a reliable supply chain of thorium for a thorium nuclear power future.The Thorium Bank would work in conjunction with a rare earth co-operative that would oversee rare earth processing and the extraction of thorium from the rare earths.Kennedy and his Thorium Energy Alliance (TEA) are lobbying U.S. Congress to establish the entities.“Thorium is easy to deal with and store safely,” said John Kutsch, Kennedy’s Chicago-based partner at the TEA.SEPARATION ANXIETYRare earth separation and processing is potentially environmentally hazardous. Environmental breaches and strict government control helped lead to the closure of rare mining in the U.S. in the 1990s, after which China rose to control over 95 percent of the rare earth market – a situation that today is the source of global trade tension.Internationally, countries like Australia and the United States have made recent moves to gain some of the market – such as Lynas’ opening of the Malaysian plant.Kennedy and Kutsch’s Thorium Bank echoes a similar initiative proposed by Takashi Kamei of Japan’s Research Institute of Applied Sciences. As we wrote here recently, Kamei’s Organisation of Rare Earth Exportation Companies would raise a tax from international rare earth consumers to help fund the safe handling of thorium at its origins.Photo: Screen grab from Gordon McDowell video of Thorium Energy Alliance Conference, Chicago, May 2012. Via YouTube.