Production Sustainability Project (Phase I) at the Existing Titanium Dioxide Pigment Manufacturing Facility Teluk Kalong Industrial Area

Kemaman, Terengganu Darul Iman Malaysia

DETAILED ENVIRONMENTAL IMPACT ASSESSMENT

On behalf of:

Tioxide (Malaysia) Sdn. Bhd. Prepared by:

ENVIRON Consulting Services (M) Sdn. Bhd. Petaling Jaya, Malaysia Date: September 2012 Project Number: MY110546A

Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

EXECUTIVE SUMMARY
1 INTRODUCTION

This Detailed Environmental Impact Assessment (DEIA) has been prepared for the proposed Production Sustainability Project (Phase 1) (hereafter known as PSP1) at the existing titanium dioxide pigment manufacturing facility operated by Tioxide (Malaysia) Sdn. Bhd. (Tioxide Malaysia). The facility which occupies a 542-acre area is one of the largest industrial sites within the Teluk Kalong Industrial Area (TKIA) in the Kemaman District in Terengganu. The location of the Tioxide plant is shown in Figure ES.1. Information and contact details pertaining to the Project Proponent, Tioxide Malaysia Sdn. Bhd., a wholly owned subsidiary of the Huntsman Group of Companies are as follows: Manufacturing Site Tioxide (Malaysia) Sdn. Bhd. Teluk Kalong Industrial Estate, Kemaman, Terengganu Darul Iman, Malaysia Telephone : + 60 9 862 8688 Facsimile : + 60 9 863 1988 Sales & Technical Divison Tioxide Asia Pacific, 5th Floor, Wisma Avon 13A Jalan 219, 46100 Petaling Jaya Selangor Darul Ehsan, Malaysia Telephone : +60 3 - 796 20888 Facsimile : +60 3 - 795 81677 Contact Persons : Mr. Visagaran Visvalingam (Site Director) Mr. Rajasegaram Sathasivam (Project Manager) Mr. Jaffar Embong (EHSSQ Manager) Mr. Azraee Aziz (EHSSQ Engineer)

This DEIA was undertaken by ENVIRON Consulting Services (M) Sdn. Bhd., a wholly owned subsidiary of ENVIRON International Incorporation established in the US. All enquiries pertaining to this study shall be directed to: ENVIRON Consulting Services (M) Sdn Bhd A307, Phileo Damansara 2, 15, Jalan 16/11, Off Jalan Damansara, 46350 Petaling Jaya, Selangor Darul Ehsan Contact Persons Telephone Facsimile : : : Ms. Viji Samuel, Senior Manager Datin Sheila Sharma, Managing Principal +60 3 7665 2986 +60 3 7665 2987

The facility which has been in operation since 1992 produces up to 61,000 tonnes of titanium dioxide (TiO2) pigments annually in the form of coating grade pigment TR92 and, plastic grade pigments RFC5 and TR28. These pigments are produced from ilmenite, a naturally occurring
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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

titanium-iron oxide mineral. In addition, the facility also produces a co-product known as Copperas which is essentially ferrous sulphate heptahydrate (FeSO2.7H2O) extracted from the main TiO2 pigment manufacturing process. Tioxide Malaysia currently produces up to 41,000 tonnes of Copperas per annum. The feedstock for the Tioxide Malaysia facility comprises of largely of high grade ilmenite imported from Australia. This high grade ore is subsequently blended with medium and low grade ilmenite from India and Africa for the TiO2 pigment manufacturing process. Due to the global decline in high grade ore, Tioxide Malaysia has to modify its existing production process to enable the use of feedstock that comprises low and medium grade ore without compromising the annual production capacity. The implementation of the PSP1 will result in an increase in Copperas production, i.e. from the existing capacity of 41,000 tonnes/annum to 220,000 tonnes/annum. The previous EIA approval for Copperas production was based on a limit of 100,000 tonnes/annum, As such, Tioxide Malaysia is legally required to submit an Environmental Impact Assessment (EIA) for the predicted increase in Copperas production as a result of PSP1. This EIA requirement is captured under Prescribed Activity 8 (b): Industry: Chemical (production capacity of each product or of combined products is greater than 100 tonnes/day). In addition, as per the requirements of the revised list of projects warranting the DEIA process (issued by DOE Putrajaya on the 24th of June 2011), the proposed EIA for PSP1 is subjected to the DEIA process. In summary, the PSP1 is a process upgrade and enhancement project which involves modification to selected unit operations within the existing pigment production process which are reduction process, crystallization process, nuclei preparation, expansion of copperas storage building and installation of additional utilities.

PROJECT DESCRIPTION

The Tioxide Malaysia facility is involved in the production of titanium dioxide (TiO2) pigments from ilmenite (FeTiO2) using the sulphate process. The resultant products are coating grade pigment TR92 and, plastic grade pigments RFC5 and TR28. The TiO2 content in ilmenite is typically around 95% with the remaining 5% comprising compounds of iron as impurities. The process flowchart of PSP1 is given in Figure ES.2. Existing TiO2 Pigment Production Process The primary raw materials utilised in the production of TiO2 pigments include ilmenite, sulphuric acid, and limestone/lime which is used in the neutralisation of the effluent generated from the process. The existing TiO2 pigments production from ilmenite involves the following processes: Black End Plant Sections Milling Digestion Reduction Settling, Filtration, Crystallization (Copperas Production) & Concentration Precipitation and Leaching

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

White End Plant Sections Calcination Surface treatment Final Milling

Copperas Production Process The Copperas or ferrous sulphate heptahydrate (FeSO2.7H2O) production process occurs outside of the main TiO2 pigment production process loop, i.e. ferrous sulphate is extracted from the main production process (sulphate process) and sent to the Copperas production process loop. PSP1 Process Description PSP1 will involve modifications (new installations, upgrades and expansions) to the following unit operations to enable the production of high quality pigments from poor quality feedstock: Reduction As lower grade ilmenite contains a larger percentage of iron oxide (impurities), the capacity of the existing reduction process will need to be increased. This will result in approximately 50% increase of scrap iron usage, i.e. from the existing 13,744 tonne/annum to 21,305 tonne/annum. In order to accommodate this change, installation of new units and upgrading of existing circulation pumps and infrastructure will be carried out. Crystallization The Crystallization section separates the iron from the TiO2 before further processing and purification of the TiO2 takes place to produce the final product. The capacity of the Crystallization process will be increased from 41,000 tonnes/year to 220,000 tonnes/year (nominal design value) and, the upgrading of the process to achieve this capacity involves the installation of new equipments within the proposed new Crystallization Building. In addition, the existing Copperas Storage Building will also be expanded. Tetrachloride Dilution To accommodate the upgraded processes described above, the tetrachloride dilution rate will need to be increased from 0.42 tonnes/hr to 0.59 tonnes/hr whilst maintaining the dilution temperature at less than 40C. New components will be installed and upgraded. Nuclei Preparation With the upgrading of the Crystallization process, the rate of nuclei addition will increase to 0.215 tonne/hr and to support this increase, a new settler tank and decant pump system will be installed and the preparation tanks will be modified. Utilities Upgrade To cater for the upgrades, the new equipment installations proposed include one new cooling tower, an upgrade of the existing substation to enable the supply of 6000 kW of power and an expansion of the MCC room.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

With the implementation of PSP1, there will be an increase in diesel consumption, cooling water generation and electricity requirement. The natural gas consumption however is estimated to be reduced. Besides there will be no new sources of air emissions but a reduction of 5.8% is anticipated in the total emissions arising from the operations. With respect to wastewater discharges, the only new source of wastewater is the new cooling tower and the total volume generated represents a minor increment of 3.2%. As a result of increased Copperas generation, the quantity of red gypsum (which is classified as scheduled wastes) produced will reduce by 27.4%. This reduction is a significant positive impact to the environment.

STATEMENT OF NEED

The proposed PSP1 is essentially a process upgrade/enhancement project which will enable Tioxide Malaysia to utilize 84% of the worlds ilmenite supply comprising of low and medium grade in light of the declining supply of high grade ore. The continued operation of Tioxide Malaysia which is the only national manufacturer of white TiO2 pigments within the TKIA is in line with the State Governments development strategy to encourage the continuity and expansion of industrial operations. The justification for the implementation of PSP1 is as below: Declining source of high grade ilmenite; Alignment with regional initiatives; Socio-economic benefits to the State and the Nation; Towards zero waste generation and sustainable production; and Commercialization value of co-products which also has eco-friendly application.

PROJECT OPTIONS

A rigorous internal process to identify technologically sound options that would enable the facility to continue its current operations amidst the marked decline in global resource for high grade ilmenite was done by Tioxide Malaysia. Four options were considered and weighed with respect to their operational, engineering, financial and environmental risks. Option 1: Slag and Low Grade Ilmenite Blending Option 2: Alternative Reduction Technology Option 3: Full Copperas Extraction (PSP1) Option 4: No-build Option

The Built-Out (Option 3) was selected to be implemented at the Tioxide Malaysia facility could ensure continued operation of the facility thereby positively contributing socially and economically in the state. In addition, based on the overall findings of this report, PSP1 demonstrates that the predicted environmental impacts can be effectively mitigated with best industrial management practices to ensure there are no significant irreversible impacts to the receiving environment. It is crucial to note that PSP1 will reduce air emissions by 5.8% and the generation of red gypsum (scheduled wastes) by 27.5%.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

EXISTING ENVIRONMENT

The summary of the existing environment at the Project Site is described in Table ES.1 below. The land use up to 5 km from the Tioxide plant is shown in Figure ES.3. Table ES.1: Summary of the Existing Environment
Item Geology and Hydrogeology Description Regionally, quaternary deposits consists mainly of unconsolidated and semi-consolidated clay, silt, sand and peat with minor gravel underlie a major portion of the site and the greater TKIA. The Pre-quaternary formation, better known as the Perlis Beds, can also be encountered around the Project site. Granitic rocks and outcrops were also reported towards the coast, as well as around Bukit Mak Indah. The TKIA land area was previously (prior to development) characterized by two aquifers, namely the unconfined and the confined aquifers. The Hydrogeological Map of Peninsular Malaysia (1975) indicates that the alluvial deposits have an estimated potential yield of between 4,000 and 6,000 gallons/hour/well. However, much of TKIA has been reclaimed for industrial use, and backfilled with earth and other fill materials. An updated version of Tube Well Distribution and Yield of Terengganu Map (2004) indicates the location of a second 3 tube well drilled yields less than 2 m /hour of groundwater. Topography The TKIA is located on the low-lying and is predominantly swampy alluvial plain bounded by coastal hills and is less than 5 m above mean sea level (MSL) elevation level. Numerous watercourses originates from the western slope of these hills flow towards the south and west into man-made drainage channels and Sg. Chukai which flows in a southeasterly direction to converge into the South China Sea. The topography within the Tioxide Malaysia site is undulating with the secure landfill areas located on higher levels compared to the main processing plant area and the settlement & monitoring ponds. The coastal area in the vicinity of the Tioxide Malaysia site is characterized by alluvium soils. In the course of developing the TKIA, the area is backfilled with deposits that are characterized by layers of soft marine clays, stiffer clays, and sands up to a 20 m depth. Shallow groundwater is encountered at the borewells within the site, ranging from depths of 2.10 m to 16.0 m below ground surface (bgs). The Tioxide Malaysia site situated on reclaimed swampy land within the catchment of Sg. Ruang, which is a tributary of Sg. Chukai. The tidal type is predominantly diurnal, with a tidal range of less than 2 m. Saline intrusion into Sg. Chukai can reach up to 20 km upstream and the presence of freshwater peat swamp forest is also evident in the area. The TKIA is located within the hinterland of the Kemaman Port, located in the heart of the new Eastern Corridor. The port is one of the deepest seaports in Malaysia and fast emerging as the new gateway to the Asia-Pacific region. As a deep-sea all-weather port, it is capable of handling vessels all year round. The TKIA is linked to the major towns of Kuantan, Chukai, Kemaman, Kertih and Kuala Terengganu, regional ports and airports by the main coastal trunk road, Federal Route 3 and the East Coast Highway. The climatic information for the period 1975 to 2011 obtained from the nearest Malaysian Meteorological Service (MMS) located at Sultan Ahmad Shah Airport, Kuantan are summarized as follows: Land Use Mean annual temperature of 26.5C; Average annual 24-hour mean relative humidity of 85.1%; Annual average rainfall of 2950 mm with annual mean 186 rainy days; and Dominant wind direction is from the northerly direction (26.5% of the time).

Soils

Hydrology

Kemaman Port

Road Network

Climate and Meteorology

Existing landuse pattern within the Zone of Impact (ZOI) of 5 km is predominantly designated industrial land, secondary forest, forest reserve and some residential areas. The nearest human settlement from the Project site is Kg. Teluk Kalong, northeast from the Site.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

Item

Description Towards the southerly direction at 3 km to 5 km is the commercial centre of the Cukai Town. Future land use as stipulated in the Draft Local Plan for Daerah Kemaman (2003 2015) prepared by the Jabatan Perancangan Desa and Bandar (JPBD) reaffirmed further development and expansion of the TKIA as heavy industrial development. Certain locations are also earmarked for future housing, commercial and tourism areas.

Environmentally Sensitive Areas (ESA)

The ESA within the ZOI identified within the Draft Kemaman Local District Plan (2003 2015) in Mukim Teluk Kalong are mainly the six hill outcrops, coastal area at Bukit Pejabat and flood prone areas to the south of the Bukit Kuang. Within the Mukim Kijal and Mukim Cukai, pockets of the Kemaman Forest Reserves and Kuala Kemaman Forest Reserves were identified and one coastal beach area stretching from Kg. Kuala Kemaman to Kg. Geliga.

Boundary noise

Existing noise levels for the year 2010 and 2012 at the existing 28 monitoring stations were within the maximum permissible sound level of 70 dBA (daytime) i.e. within the range of 43.2 dBA to 62.2 dBA. Slight exceedances of the nighttime limit of 60 dBA were noted, ranging at 47.0 dBA to 62.1 dBA). Four of the existing 28 stations were selected for the ad-hoc 24-hour assessment. Overall, noise levels monitored at the stations were well within the prescribed regulatory limit.

Air Quality

Existing 2006 to 2011 ambient air quality for four main air quality parameters (total acidity, dust fall, particulate emissions) monitored at the five existing ambient air quality monitoring stations were analysed. Results show that the dustfall rate were well within the 2 Recommended Malaysian Air Quality Guidelines (RMAQG) limit of 133 mg/m /day for 1 year averaging time. To assess and establish the existing ambient air quality at the nearest sensitive receiver, an ad-hoc ambient air quality monitoring was carried out at the nearest settlement which is Kg. Teluk Kalong, for TSP, PM10, SO2, NO2, CO, acid mist as H2SO4, Fe and Ti. Ad-hoc ambient air quality monitoring at the nearest human settlement shows that concentrations of all monitored parameters were well below than their respective RMAQG. Tioxide Malaysia also undertakes stack emission monitoring for all its six existing stacks. The stack emission monitoring results for the period 2010-2012 showed that all parameters were in compliance with the limits stipulated in the Environmental Quality (Clean Air) Regulations 1978.

Marine Water Quality

A marine water quality monitoring programme involves the collection of samples from nine monitoring stations located around the final discharge point at Tiger Bay has been established. The marine water quality analysis results for the period 2009-2011 were reviewed and compared against the Class 3 standards stipulated in the Malaysian Marine Water Quality Criteria and Standards (MWQCS). Based on the marine water analysis results, DO levels in the samples were higher than the Class 3 MWQCS of 3 mg/l for all the sample locations. Suspended solids (SS) concentrations were well within the Class 3 limit of 100 mg/l (2009 and 2010) but increased significantly during in April 2011 monitoring event and decreased to levels within the Class 3 limit during the second monitoring event in September 2011. Concentrations of most of the heavy metals were generally below the Class 3 limit except Cu, Pb and Cd concentrations recorded occasional exceedances.

Surface Water Quality

Onsite Monitoring Pond

There are three monitoring ponds located onsite, which receive clear overflow from the three onsite settlement ponds. The overflow from these ponds flow via three individual channels and converges into the final discharge sump and monitored daily and weekly to ensure that the water flowing complies with regulatory limits. The results of the water quality analysis are compared against the Standard B limits of Environmental Quality (Industrial Effluent) Regulations, 2009 for treated industrial effluent. The average pH, DO and suspended solids for the water samples at monitoring pond were generally within the Standard B limit in 2010 and 2011. Most of the heavy metals analysed were within their respective Standard B limits, with the exception of five heavy metals i.e. Mn, Ni, Pb, Cd and As which have had recorded exceedances in 2011.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

Item

Description Landfill Leachate & Decant Tower

Tioxide Malaysia site operates an onsite secure landfill site for the storage of the red gypsum (scheduled wastes under SW205 of the Environmental Quality (Scheduled Wastes) Regulations, 2005). The surface runoff from the landfill area and overflow from the decant tower are monitored weekly since 2010 for pH, temperature, conductivity, turbidity and suspended solids. Final Discharge Point

The final discharge point is located at the southwest corner of Tioxide Malaysia site which flows directly to the sea via a marine outfall at Tiger Bay. Samples of the final discharge (from the collection sump) are collected daily, weekly and monthly to analyze various parameters to ensure compliance to the Standard B limits. All the Standard B parameters analyzed monthly for the year 2010 and 2011 are well below the Standard B limits. Groundwater Eight groundwater monitoring wells were established at the site to monitor pH, temperature, DO, sulphate, SS, dissolved and total Fe, dissolved and total Mn and dissolved and total Ca. Groundwater quality data indicate range of pH values shows slightly acidic to neutral conditions. DO levels in groundwater fluctuated throughout the year 2010 and 2011. The heavy metal concentrations in groundwater samples did not vary much. Tioxide Malaysia also undertakes bi-annual monitoring of trace metals (Fe, Ti, Cr, Cu, Mn, Ni, Pb, V, Zn, Cd, Sn, Hg and As) in the intertidal sediments at the coastal area (surrounding the marine outfall). The sediment particulate size distribution and extractable trace metal data were obtained from the intertidal monitoring programme. Tioxide Malaysia undertakes annual ecological and physio-chemical assessment of the marine environment at Tiger Bay by a UK-based ecologist. The survey is carried out to assess any potential effects that might have arisen due to the release of the treated discharge from the intertidal and subtidal outfalls. The marine survey entails the collection of samples at seabed and sediment at the subtidal and intertidal zone of the receiving marine environment. The 2010 and 2011 surveys concluded that the marine receiving environment for the wastewaters from Tioxide Malaysia support rich and diverse assemblages of marine species, including several groups of sensitive, stress-intolerant marine animals and these assemblages remain rich and diverse. An appraisal of the existing radiological environment is done by reviewing the 2009 to 2011 radiological data collected by Malaysian Nuclear Agency to establish the baseline radiological environment for the Project. The monitoring programme is conducted on-site (plant site and plant building) and off-site (within the ZOI of 5 km from Tioxide Malaysia) to monitor particulate radioactivity, external radiation level and Ra/Th progenies concentration in soil, sediment, water and air. Monitoring results showed that there is no enhancement of radiation dose in the environment. In addition, occupational radiation dose from 2009 to 2011 showed that the workers only received a small amount of radiation dose (0.30 mSv to 0.87 mSv) and the public received radiation dose from natural background levels (0.14 mSv to 0.20 mSv).

Marine Sediment Monitoring Programme Ecological and Physico-chemical Assessment

Radiological Monitoring

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

ENVIRONMENTAL IMPACT ASSESSMENT

The assessment of potential impacts anticipated from the implementation of the PSP 1 is summarized below, and the table of main issues and mitigating measures is given in Table ES.2.

6.1

Air Quality

6.1.1 Construction Phase For the construction of PSP1, no major earth excavation or filling works will be carried out. Construction activities are confined to the Crystalliser Building, expansion of the existing Copperas Storage Building, installation of new process machineries and extension of substation and MCC Building. Fugitive dust emissions and exhaust emissions are anticipated and may lead to reduced visibility and affect the ambient air quality to a limited extend. 6.1.2 Operation Phase

During the operational phase, there will be no new source of air emission and it is predicted that with the process enhancement achieved through the implementation of PSP1, the total emissions will be reduce by 5.8%. The primary sources of air emissions arising from the existing operations at the Tioxide plant are: the Ball Mill, Digester, ST Turbo Dryer, Waste Gas Treatment System (WGTS), Fluid Energy Mill (FEM), Boilers (3 units) and Pacific Iron Products (PIP) Plant. The model used to assess the air quality impact is the AERMIC (American Meteorological Society/ EPA Regulatory Model Improvement Committee) Regulatory Model (AERMOD). The maximum average concentrations (MAC) were predicted for TSP, PM10, NOx, CO, TOC, H2SO4, Fe and Ti. The assessment was carried out for both normal plant operations as well as during abnormal situation (failure of air pollution control systems). Overall, the predicted MACs for the pollutants evaluated were well below their respectively regulatory limits under the Recommended Malaysia Air Quality Guidelines. Based on the findings of the dispersion modeling as well as the ad-hoc ambient air quality monitoring programme, it can be concluded that the existing operations do not exert a significant impact to the environment within the Zone of Impact nor to the sensitive receptors (Kg Teluk Kalong, TATI and Kg Bukit Kuang). With the implementation of PSP1, where the total emissions are predicted to reduce by 5.8%, the air quality impacts will also correspondingly reduce. Therefore, air quality impacts are predicted to be positive.

6.2
6.2.1

Water Quality
During Construction

Due to the small scale of construction activities which is largely confined to the works area, significant soil erosion is not expected. However, excavation, backfilling and foundation works will loosen and expose the soil causing minor sediment transport/erosion. This will result in increased suspended solids in surface runoff. In addition, other pollutants including traces of grouting and wet building materials, oily residues, paint residues, lacquers, curing compounds may potentially contaminate the surface runoff albeit to a small degree.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

Site management advise that during the construction phase, contaminated surface runoff from the proposed work areas will be collected in the pits and conveyed to the NT Plant for treatment. There will be no release of these runoffs to the stormwater drains. 6.2.2 Operational Phase

The main sources of process effluent are the filtrates and slurry from the Settler underflow arising from the pigment manufacturing process as well as the contaminated (acidic) discharge from the collection pits. All the waste streams are treated within the onsite WWTP which comprises an internal pH control system, the Neutralization Treatment (NT) Plant and the lagoon system (consisting of one Slurry Lagoon, three Settlement Ponds and three Monitoring Ponds). With the implementation of PSP1, the total volume of treated effluent is 9,090,000 m3/year which is equivalent to 24,904 m3/day (1,038 m3/hr). The sources of the additional wastewater are: 1. Cooling water discharge (from the new cooling tower) (75% volume); and 2. Nuclei preparation wash waters (25% volume). The existing WWTP is able to cater for the marginal increase in wastewater generated as described below: There will be no increase in the rate of influent into the NT Plant; The main contributor to the increase in the rate of discharge of treated effluent is the cooling towers which do not require chemical treatment but will be conveyed directly to the Runoff Pond; The overall increase in the effluent discharge is relatively small at 3.2%. Based on the assessment, it can be concluded that the implementation of PSP1 will not impact the currently treatment capability of the existing WWTP either in terms of hydraulic loading or processing of iron in the influent. The treated effluent quality is expected to be similar to the existing effluent quality or marginally improved due to the small dilution effect from the increased volume of effluent.

6.3
6.3.1

Wastes Management
Construction Phase

Mainly municipal solid waste comprising of construction spoil, general waste and vehicle/equipment parts (such as tyres, metal components, etc.) will be generated. Small amount of scheduled wastes is likely to be generated which will comprise of mineral oils/engine cleaning fluids, industrial paints and various types spent/waste oil and soil/rags contaminated with oily residues from construction equipment. All wastes generated will be appropriately collected and disposed (refer to Table ES.2). 6.3.2 Operational Phase

Solid wastes (scheduled and non-scheduled) generated from the existing Tioxide Malaysia operations include: Gypsum generated from the NT Plant; Gypsum produced from the WGTS; Residue from the digester containing unreacted ilmenite and silica residue;

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

Solids from the settlement and monitoring ponds; and Domestic and non-scheduled industrial waste.

Gypsum represents the largest quantity of waste generated. The main component of gypsum is calcium sulphate which is formed as a result of the neutralization of acid residues with lime and limestone. All these residues which are classified as scheduled waste under SW 205 of the Environmental Quality (Scheduled Waste) Regulations, 2005 are transported and disposed within the onsite secure landfill cells. The landfill area occupies an area of approximately 11,084 acres/hectares. Domestic waste is removed from the Tioxide Malaysia regularly by licensed contractors for disposal at approved dumping sites in Kemaman. The other forms of scheduled wastes (e.g. spent oil, contaminated materials) are disposed at the Intergrated Waste Management Centre in Negeri Sembilan which is operated by Kualiti Alam. With the PSP1 project, the quantity of red gypsum will reduce as more Copperas will be extracted from the main process as co-product. PSP1 will reduce 27.4% of red gypsum currently generated from the existing annual quantity of 473,000 tonnes to 341,000 tonnes/annum. Therefore, with PSP1, less red gypsum will require disposal within the onsite secure landfill and it is estimated that the lifetime of the landfill can be extended by an additional 6 years. Reduction of waste is in line with the aspirations of Tioxide Malaysia towards a more sustainable operation, i.e. Zero Waste in the future.

6.4
6.4.1

Noise Impact
Construction Phase

Noise arising from the construction activities is not expected to be significant as the activities will largely involve equipment installation, movement of vehicles transporting the new equipment/parts for PSP1. Due to the relatively small scale of the activities and the short duration of the construction phase, the noise impacts arising are expected to be short-term and transit, without any adverse of irreversible impacts to the environment or the nearby local community. 6.4.2 Operational Phase

During the operational phase, the proposed project is potentially generating higher noise due to the operation of machinery. A noise level assessment was carried out using the CUSTIC 2.0 software which provides options to model noise emissions from a wide range of sources that might be present at industrial areas and urban areas. The basis of the model is the linear sound propagation equation, which is used to model simple point source emissions from vehicles or industries. The results show that the predicted cumulative noise levels at the site boundaries are below the stipulated DOE limits of 70 dBA and 60 dBA during daytime and night-time respectively. The only exception is the level at western boundary, predicted at 60.2 dBA which is slightly above the stipulated limit. However, it is mainly contributed by the existing background noise level. Based on the findings, noise impact due to the proposed project is not significant, adverse or irreversible. Recommendations in the following section are given to ensure the noise effect is kept to the minimum.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

6.5

Economic Valuation of Environmental Impacts

The economic valuation focuses on two environmental effects of the proposed project; change in air quality and change in noise levels. To evaluate the environmental benefit and environmental cost, the approach is to analyzes the environmental impact on health, agriculture, industrial and land value. This study does not attempt to evaluate the economics of the environment impact since the findings on the environmental effects, air and noise, indicate insignificant impacts. In addition, the proposed project is located on existing industrial setting and controlled environment. The environment impact assessment concludes that air and noise effects resulting from the proposed project have no significant negative impacts on the human environment; meaning with the project there is no change in environment to affect human environment compared to existing scenario. Based on the findings and impact identification results, the study does not proceed to quantify the impact. Thus there is no economic valuation exercise conducted. This results in the conclusion that the environment impact of the project has no economic value.

6.6
6.6.1

Traffic Impact
Construction Phase

The initial construction activities will require the delivery to site by road of construction/building materials such as concrete and structural steel, and equipment/components of PSP1. The majority of construction material deliveries will be by standard low loaders, trailers and trucks. Off-site transport of construction spoil/debris will also be carried out. The estimated number of truck movements generated during the peak construction phase was not available at the time of reporting. The majority of these trips will be from the construction materials suppliers in Kuantan and Kemaman. The increased vehicular movement during the construction phase may potentially impede traffic during peak hours along the main Kuantan-Kemaman Road. As the period of construction is relatively short (~14 months) and the extent of activities limited, the construction phase traffic impacts are expected to be transient and not significant. 6.6.2 Operational Phase

In the operational phase, the additional traffic generated will be largely due to the transport of the additional Copperas generated at the Tioxide Malaysia facility. With the implementation of the PSP1, the quantity of Copperas produced will increase to 220,000 tonnes/annum. Of this amount, 50,000 tonnes will be sold to the PIP plant located within the site and; the remaining 170,000 tonnes is expected to be sold to external customers. For external customers, the Copperas will be transported either by 25-tonne loads via trucks or bagged and transported via 20-tonne containers. A combination of both modes of transportation is also possible.

6.7

Socio-Economic Impact

A socio-economic impact appraisal was conducted to establish the baseline socioeconomic profile of the local population within the 5km ZOI; obtain residents perception towards the proposed PSP1 Project; and examine potential socio-economic concerns and impacts. The methodologies employed include (i) the use of secondary data; (ii) stakeholder engagement through public dialogues and interviews and (iii) conducting a perception, health and socio-economic survey of residents within the ZOI.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

Stakeholders identified include the Mukim Penghulu, Ketua Kampungs and Jawatankuasa Kemajuan dan Keselamatan Kampung (JKKK) members, Jabatan Pertanian and Jabatan Perikanan. A total of 250 respondents were randomly selected, representing 5.4% of the total number of households located inside the 5km radius ZOI. Two separate public engagement sessions were held: at Dewan Sivik in Bukit Kuang on 16th June 2012 (132 urban residents) and at TATI University College in Teluk Kalong on 23rd June 2012 (138 rural settlers). Generally, no major issues or complaints were raised at the engagement sessions with regard to environmental hazards, reduction in air or water quality or negative health impacts arising from Tioxides current plant operation over the last 22 years. From the socio-economic assessment, low recruitment of the local population as permanent workers at the plant may remain significant unless there is a long-term concerted effort by the plant management to work in partnership with the local education and vocational institutes to provide training and internship. Interface with the local communities inside the 1km and 3km impact zone can be improved through long-term engagement with the local community and religious leaders, extension the CSR programmes and more frequent engagement with the community and schools. As many of the permanent staff of the plant reside within those communities, the residual impact from insufficient community outreach may not be significant.

6.8

Health Impact

A health assessment is crucial to determine the potential health impact to the local community in the vicinity of the proposed Production Sustainability Phase 1 (PSP1) Project. The potential health impact of the proposed project is determined with the health risk assessment methodologies, namely: Health perception survey; and Reviewing the secondary health data from the nearest health facilities; Kemaman District Health Office or PKD Kemaman (Pejabat Kesihatan Daerah Kemaman) and Kemaman district hospital Health risk assessment methodology

Based on the secondary data review, respiratory diseases are the main cause for outpatients visit in healthcare facilities and hospital admission. A review of workers chemical and radiation medical surveillance from 1995 to 2009 were satisfactory, in which none of the biological samples taken for mercury and toluene level exceeded the Biological Exposure Index of 35gm/gm creatinine and 0.05mg/L respectively. Urinary Hippuric acid levels were also found to be well below the BEI of 1.6gm/gm creatinine. Sample results tested for radiation were insignificant. Legionelle exposure monitoring from 2001 to 2009 found only one significant exposure level in 2005. The environmental health risk assessment (EHRA) is a non-radiological assessment for the Proposed PSP1 involves hazard identification, dose-response relationship, exposure assessment and risk characterization. Based on the air dispersion study results, all receptors are not likely to pose any acute and chronic health hazards. Toluene, acid mist as H2SO4 and titanium are unlikely to cause significant health risk to population. Residual impacts are rendered as insignificant, provided that the proposed mitigating measures are well implemented.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

6.9

Quantitative Risks

A Quantitative Risk Assessment (QRA) was conducted for PSP1 to address the risk present during the operational phase of the proposed PSP1. The scope of work includes the following: Identification of potential hazardous incidents; Frequency and consequence estimations of the incidents identified; Evaluation of the individual risk, based on the criteria established by DOE; and Recommendation of risk reduction measures to reduce the risk levels to as low as reasonably practicable (ALARP), as necessary.

The hazardous materials identified for PSP1 include: Usage of toxic & corrosive substance titanium tetrachloride (TiCl4). Usage of corrosive substance sulfuric acid (H2SO4) & hydrochloric acid (HCl). Release of flammable gas from reduction process hydrogen (H2). Increased usage of diesel as fuel.

The results of the risk assessment show that individual risk levels at 10 per million per year (10 x 10-6) and 1 per million per year (1 x 10-6) are contained within the site/premise boundary of Tioxide Malaysia and will not affect any neighboring land users. The assessment was only conducted for the proposed PSP1. For the existing plant facilities, individual risk levels are referenced from the previous QRA results in the Detailed EIA for Titanium Dioxide Plant Project (1989). In comparison with the existing individual risk contours, the risk posed by PSP1 is insignificant compared to the existing operations. In other words, the individual risk posed by PSP1 is not expected to contribute any significant incremental risk to the existing facilities. Hence, the cumulative risk level for existing facilities and PSP1 remains as the current situation.

6.10 Radiological Impact

A Radiological Impact Assessment (RIA) of the PSP1 project was prepared by the Malaysian Nuclear Agency (MNA) for the approval of the Atomic Energy Licensing Board (AELB). The ilmenite mineral is known to contain a small amount of naturally occurring radioactive materials (NORM). As the mineral is processed chemically, it may potentially disturb the physical and chemical structure of the mineral and eventually lead to slight enhancement of the original concentration of NORM. The main objectives of the study are to assess potential radiological impact caused by current and future (implementation of PSP 1) operation of the plant to the workers and the general public living in the surrounding areas of the plant. The study takes into consideration both normal operation of the plant and possibility of abnormal occurrences including during transportation of the materials to the plant. Results of the assessment based on job scenario at the plant site (i.e. current and future operation) are found to vary between 0.13 mSv/y to 0.42 mSv/y (including background radiation). Most of the doses received are due to external radiation. The highest estimated dose of 0.42 mSv/y is expected to be received by workers working in the landfill area. The estimated collective doses for each type of work are also found to be below the criteria of 1 mSv used in the assessment. In conclusion, the current and future (implementation of PSP 1) operation of the plant would not cause any radiological risk to the workers and members of the public living in the surrounding areas of the site beyond what is allowed by the regulatory authority.
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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

ENVIRONMENTAL MANAGEMENT PLAN

Effective management and monitoring of activities on the site will be essential to ensure environmental objectives are met and operations are carried out in accordance to regulatory requirements and industrial best management practice. The mechanism for ensuring the assessed potential environmental impacts and applicable appropriate mitigation measures are implemented, and are effective is done by developing and implementing an Environmental Management Plan (EMP) for the construction and operational phases of the project. For PSP1, the construction monitoring programme would include ambient air, boundary noise and water quality and silt trap discharge. The operational monitoring programme would include scrubber gas emissions, boundary noise, ambient air and drainage discharge from the site. For the construction phase, the Consultants recommend that these requirements be specified in the tender document for EPCM Contractors (and their respective Subcontractors). The data collected from these monitoring events shall be submitted to DOE Pahang. The EMP developed will include a checklist (for the construction and operational phases) which will be used by the Auditor during the compliance audit. The audit will also include a review of the relevant permits and licences required by the DOE, environmental monitoring data, review of complaints received from the public (if any) and other related issues as well as a thorough inspection of site activities. The results of the audit will be used to identify any weaknesses in the EMP and to provide information for updates where necessary.

CONCLUSION

The PSP1 project entails modification of process-related facilities with the installation of new equipment, upgrading of existing equipment, expansion of the existing Copperas Storage Building, construction of a new Crystallizer Building and upgrading of existing utilities. With the implementation of PSP1, the air emissions will reduce by 5.8%, the quantity of red gypsum will significantly reduce by 27.4% and boundary noise levels were predicted to not exceed the regulatory limits. The volume of treated wastewater generated is expected to increase marginally by 3.2% with no impacts predicted to soil or groundwater. From a socioeconomic perspective, the Project will ensure continued operations of the existing pigment manufacturing facility which will contribute positively to the livelihoods of the local community as well as the economy and industrial development of the state as a whole. The health impact and the radiological impact assessments conducted also indicate no adverse impacts to the plant employees and the local community. The findings of the DEIA conclude that with the implementation of recommended mitigation measures and proposed environmental management plan, the PSP1 Project will not result in any significant adverse impacts to the receiving environment.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia

Table ES.2: Summary of Potential Impacts and Mitigating Measures

Activities/Issues 1. Air Quality Potential Impacts Construction Phase Fugitive dust Vehicular emissions Mitigating Measures Construction Phase Regular surface damping or wetting of works areas, stockpiled aggregates especially during dry weather. Maintain good housekeeping at all times at the works area. Provide wash trough at the ingress/egress points. All vehicles raopeting within the construction works area to adhere to speed limits not exceeding 20 km/hr. All construction vehicles transporting dusty materials should be secured with tarpaulin sheets. Open burning on the site premises is strictly prohibited. Operational Phase Waste Gas Treatment System: o Venturi scrubber: Performance monitoring undertaken on a monthly basis by the supplier. Inspection of the scrubber system pumps are carried out bi-weekly. o Electrostatic precipitator: Internal flushing of the system is carried once every 2-3 weeks with the major internal inspection and cleaning carried out once every three months. o Online SO2 continuous emission monitoring system: Quarterly inspection and service Jet Bubble Reactor: Preventive maintenance of the reactor is carried out on a monthly basis, with the major inspection and cleaning activities undertaken once every 2 months. Baghouse filters: Inspect filter performance once every 90 days and undertake preventive maintenance on a monthly basis. Chapter 5.3 Reference in DEIA Report Chapter 5.2

Operational Phase Ball Mill Digester ST Turbo Dryer Waste Gas Treatment System (WGTS) Fluid Energy Mill (FEM) Boilers (3 units) Pacific Iron Products (PIP) Plant.

2. Water Quality

Construction Phase No significant soil erosion expected but only minor sediment transport/ erosion. Contaminated surface runoff from the proposed work areas.

Construction Phase Contaminated surface run-off will be collected in pits and conveyed to the NT Plant for treatment. Re-vegetate or seal/pave denuded stretches after the construction works. Cover uncovered stockpiles of excavated material.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia Reference in DEIA Report

Activities/Issues

Potential Impacts Operational Phase Continuation of the similar operations of the existing wastewater treatment. The existing sources of water quality impacts are: o Process filtrates; o Slurry from the Settler underflow; o Contaminated (acidic) and uncontaminated surface run-off from the main plant processing areas; o Leachate from the onsite secure landfill; o Sanitary wastewater; and o Discharge from the cooling water towers and boiler blowdown. Limited increase of the overall rate of effluent discharge at 3.2%. Construction Phase Localized and insignificant noise impact from construction vehicles and equipment installation.

Mitigating Measures Install portable chemical toilets and desludge them consistently. Install oil & grease (O&G) trap if a temporary canteen is set up for the workforce. Enforce best construction wastes management practices by the nominated Contractor.

Operational Phase st nd Control pH for optimal treatment in the 1 and 2 stage neutralization processes within the NT Plant. Shut down pre-leach section of the production process if problem with WWTP is not rectified within 2 hours. Construct tanks within concrete bunds (holding capacity of 110% of the volume of the largest tank) and provide pumps to remove any potential spills from the bunds.

3. Noise Level

Construction Phase Shut down machineries and construction vehicles that are not in use. Material stockpiles and other structures to act as a screen for operating noisy equipment. Selection of quieter pile drivers (e.g. hydraulic pile) for piling. Proper installation of engine silencers in noisy equipments. All transport vehicles must comply with the Environmental Quality (Motor Vehicle Noise) Regulations 1987. No overloading of transportation vehicles. Provide protective ear mufflers to workers. Operational Phase Consider the noise attenuation features of the equipment during selection of the equipment models for the plant. Employ engineering measures for additional noise attenuation (e.g. installing mufflers, enclosures, etc.)

Chapter 5.5

Operational Phase Principal noise sources of the proposed project are from the reduction, copperas removal, tetrachloride dilution, nuclei preparation and crystallization sections. Noise generated is mainly from the operation of

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia Reference in DEIA Report

Activities/Issues

Potential Impacts machinery. The cumulative noise levels modeled at the site boundaries are below the stipulated DOE limits of 70 dBA (daytime) and 60 dBA (nighttime), with the exception of western boundary (60.2 dBA during nighttime) mainly contributed by the existing background noise levels. Insignificant noise impact is expected due to the proposed Project.

Mitigating Measures House noisy equipments within a building or an enclosure. Consider to insulate equipment piping accord. Orientate equipment within the plant area to capitalize on the existing buildings and structures as noise barriers. Align noisy equipment within the plant to maximize distance of the equipment to the nearest neighbouring site boundary. Reduce vibration level of the machinery and their ancillaries of the compressors, fans and pumps.

4. Waste Management

Construction Phase Main solid wastes generated are municipal wastes and scheduled wastes. Obstruction of drainage flow by improperly managed wastes. Contamination of surface water by grouting materials, oil & grease, paints. Attraction for disease carrying rodents, insects and possible health risks and odour nuisance. Potential for fire hazards within the site.

Construction Phase Good housekeeping practices to be observed within the site and at the workers camp General construction spoil should be recycled on site as much as possible. Domestic waste generated to be stored in garbage bins/secure containers and be collected regularly by a contractor for disposal at an approved landfill. Unsalvageable construction spoil should be stockpiled at a designated site. Scheduled wastes to be stored and disposed by licensed contractor. Operational Phase Continuation of groundwater monitoring. Scheduled wastes generated on-site can either be recycled or disposed at Integrated Scheduled Waste Management Centre (ISWMC) operated by Kualiti Alam. Adhere to the Environmental Quality (Scheduled Waste) Regulations, 2005.

Chapter 5.4

Operational Phase No additional sources of scheduled waste or nonscheduled wastes. Solid wastes generated from the existing operations include: o Gypsum generated from the NT Plant; o Gypsum produced from the WGTS; o Residue from the digester containing unreacted ilmenite and silica residue; o Solids from the settlement and monitoring ponds; o Domestic and non-scheduled industrial waste; and o Other forms of scheduled wastes. Implementation of PSP1 will reduce 27.4% of the red gypsum generated, thereby extending the

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia Reference in DEIA Report Chapter 5.6

Activities/Issues 5. Economic Valuation of Environmental Impacts 6. Traffic and Transportation

Potential Impacts lifetime of the landfill by an additional 6 years. Construction and Operational Phase The economic valuation examines the environmental impacts of air and noise. The study concludes that the environmental impact of the Project has no economic value. Construction Phase Delivery of construction/building materials and small machinery and equipments by low loaders, trailers and trucks. Increased vehicular movement could impede traffic during peak hours along KuantanKemaman road. Increased traffic could potentially affect road surfaces. Insignificant traffic impacts due to short construction period and limited extent of activities. Operational Phase Increased traffic largely due to transportation of additional Copperas generated by the famility.

Mitigating Measures Construction and Operational Phase No need of mitigating measures as there is no impact on economic value.

Construction Phase Transport construction machinery and materials only during off-peak hours of the day. Restrict vehicles speed limit to 90 km/hr to reduce dust dispersion and fugitive material spillage. Observe safety measures during loading and transporting of heavy machinery and construction materials. Maintain transportation vehicles and employ licensed drivers.

Chapter 5.7

Operational Phase Use information signs and safety equipment on all trucks during accidents. Adhere to relevant road transport regulations. Design facilities on the tankers to minimize spillage occurrences. Proper scheduling of the transportation trucks. Construction Phase Enforce speed limits to construction vehicles. Provide wheel-washing facilities at the factorys exit. Ensure proper housekeeping and cleanliness at the construction site. Implement a structured traffic management plan. Chapter 5.8

7. Socio-economy

Construction Phase Employment and spill-over effect within the local area and the Kemaman region (e.g. food and housing services). Limited dust nuisance and road safety may affect the health and safety of the local population along the main access route. Operational Phase Continuation of the synergistic relationship with other industrial facilities within the TKIA.

Operational Phase Consider to initiate a People Investment programme in collaboration with local education institutions to mentor and train local youths before permanent employment.

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Detailed Environmental Impact Assessment Production Sustainability Project (Phase 1) Teluk Kalong Industrial Area, Kemaman Terengganu, Malaysia Reference in DEIA Report

Activities/Issues

Potential Impacts Limited direct employment opportunities for the locals due to low-manning operations. Indirect employment opportunities in industries benefited from Tioxide Malaysias main product (Titanium dioxide) and co-product (Copperas). Construction Phase Increase in potential mosquito breeding places due to poor waste management practices. Influx of construction workers raises the risk of infectious diseases and sexually transmitted diseases. Operational Phase Health impact due to toxic air pollutants and criteria air pollutant (PM10, NO2 and CO) are not likely to pose significant health risk to population living in the area. Operational Phase Hazards identified and considered for QRA are TiCl4 and H2. Major hazardous events involve failure of process vessel, release of H2 gas and air blower failure at the reduction tower. Insignificant risk posed by PSP1 as compared to the existing operations and cumulative risk level for existing facilities and PSP1 remain the same. Operational Phase No radiological risk to the workers and public living in the vicinity of the Project site will be posed beyond what is allowed by the regulatory authority.

Mitigating Measures

8. Health Impact

Construction & Operational Phase Continuation with the existing occupational health screening. Strengthen the occupational hygiene knowledge of the workers. Implement safety and environment program to safeguard workers health and safety. Regular periodical medical and physical examinations for the employees. Institute medical intervention to prevent any adverse health effects to the workers.

Chapter 6

9. Quantitative Risk Assessment (QRA)

Operational Phase Implement proper safety management system, inspection and maintenance procedures. Establish and practice the emergency response plan and incidents and accidents reporting procedure at the Project site to ensure that the risk levels remain As Low As Reasonably Practicable (ALARP).

Chapter 8

10. Radiological Impact

Operational Phase No need of mitigating measures as there is no impact on radiological risk.

Chapter 9

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Kijal

Sg. Chukai

Tioxide Malaysia

Port of Kemaman

Chukai Town

Sg. Kemaman

South China Sea

Teluk Kalong Industrial Area Project Site

Title:

Date:

Approved:

Drawing No.:

Location of Tioxide Plant

Project:

August 2012
Consultant:

Final

Figure ES.1

Project Proponent:

Production Sustainability Project (Phase I) Tioxide (Malaysia) Sdn. Bhd. Kemaman, Terengganu.

Wastewater Treatment Plant

Title:

Project Proponent:

Scale:

Date:

Job No.:

Process Flow Chart

Project: Consultant:

As Shown
Dwg Size:

August 2012
Approved:

MY110546A
Drawing No.:

Production Sustainability Project (Phase I) Tioxide (Malaysia) Sdn. Bhd. Kemaman, Terengganu.

A4

Final

Figure ES.2