Malaysia extends bauxite mining ban for another three months

KUALA LUMPUR (Reuters) - Malaysia on Thursday extended a moratorium on bauxite mining by three months, from the start of 2017, to allow remaining stockpiles of the aluminium-making commodity to be cleared.

Natural Resources and Environment Minister Wan Junaidi Tuanku Jaafar also said that high stockpiles, nearly a year after the ban was first imposed, suggested illegal mining may have been carried out.

"There's an indication that there is illegal mining going on, otherwise there would be no heap (of bauxite)," Wan Junaidi told a press conference.

About 2.95 million tonnes of stockpiles remain around Kuantan, the capital of the key bauxite producing state of Pahang, he said. Kuantan had 3.6 million tonnes of stocks in April.

Malaysia's largely unregulated bauxite mining industry had boomed over the last 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 led to a public outcry with many complaining of water contamination and destruction of the environment.

In January, the government imposed its first three-month ban on mining the commodity, before extending it multiple times.

Wan Junaidi said that any mining firms operating illegally might be granted permission to extract bauxite in the future if they applied for proper permits from the state government.

During the ban, Malaysia had exported 5.3 million tonnes of bauxite, he said, just a quarter of the 20 million tonnes shipped to China between January and November 2015.

(Reporting by Liz Lee; Writing by Rozanna Latiff; Editing by Christian Schmollinger and Joseph Radford)