PRODUCTION SUSTAINABILITY PROJECT (PHASE I) AT THE EXISTING TITANIUM

DIOXIDE PIGMENT MANUFACTURING FACILITY, TELUK KALONG INDUSTRIAL

AREA, KEMAMAN, TERENGGANU DARUL IMAN, MALAYSIA

REVIEW OF DETAILED ENVIRONMENTAL IMPACT ASSESSMENT PREPARED BY:

1. NURI IDAYU BINTI ABDULLAH 183150

2. SITI NUR AIN BINTI ZULKIFLI 184632
3. NAZATUL SHIMA BINTI AZMI 182514
4. NUR ATHIRAH BINTI ABU BAKAR 184686
5. FAUZAN FAHMI BIN MOHAMAD NORA’ENI 185851
INTRODUCTION
The Detailed Environmental Impact Assessment (DEIA) has been prepared for the proposed
Production Sustainability Project (Phase 1) or known as PSP1 at the existing titanium dioxide pigment
manufacturing facility operated by Tioxide (Malaysia) Sdn. Bhd. The facility occupies 542 – acre area,
which is one of the largest industrial sites within the Teluk Kalong Industrial Area (TKIA) in the
Kemaman District in Terengganu. Figure 1 shows the site location.

Figure 1. The project site (Tioxide Malaysia)

The DEIA was undertaken by ENVIRON Consulting Services (M) Sdn. Bhd, a wholly owned subsidiary
of ENVIRON International Incorporation established in the US.
The facility starts the operation since 1992, produces up to 61000 tonnes of titanium dioxide (TiO 2)
pigments annually in the form of coating grade pigment TR92 and plastic grade RFC5 and TR28. These
pigments produced from ilmenite, a naturally occurring titanium – iron oxide mineral. This 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 41000 tonnes of Copperas per annum.

The feedstock for the Tioxide Malaysia facility comprises of largely of high grade ilmenite imported
from Australia. During manufacturing process, it will subsequently blended with medium and low
grade ilmenite from India and Africa. Due to 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, from the existing
capacity of 41000 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 Coppeas 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 (TiO 2) 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.

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:

1) Black End Plant Sections

• Milling
• Digestion
• Reduction
• Settling, Filtration, Crystallization (Copperas Production) & Concentration
• Precipitation and Leaching
2) 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. The ferrous sulphate is extracted from the main
production process (sulphate process) and sent to the Copperas production process loop.

PSP1 Process Description

PSP1 involve modifications (new installations, upgrades and expansions) to the following unit
operations to enable the production of high quality pigments from poor quality feedstock:

1) Reduction

To increase the capacity of the existing reduction process as lower grade ilmenite contains a larger
percentage of iron oxide (impurities). This will result in approximately 50% increase of scrap iron usage
(from existing 13,744 tonne/annum to 21,305 tonne/annum). The installation of new units and
upgrading of existing circulation pumps and infrastructure will be carried out.

2) 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 will be increased from 41,000
tonnes/year to 220,000 tonnes/year (nominal design value). This involve the installation of new
equipment within the proposed new Crystallization Building. The existing Copperas Storage Building
will also be expanded.

3) Tetrachloride Dilution

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 40˚C, to accommodate the upgraded processes
described above. New components installed and upgraded.

4) Nuclei Preparation

The rate of nuclei addition need to increase to 0.215 tonne/hr. A new settler tank and decant pump
system will be installed and the preparation tanks will be modified.

5) Utilities Upgrade

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.
Implementation of PSP1 will increase in diesel consumption, cooling water generation and electricity
requirement. The natural gas consumption estimated to be reduced. Besides, there will be no new
sources of air emissions, and reduction 5.8 % is anticipated in the total emissions arising from the
operations. 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, the quantity of red gypsum (which is
classified as scheduled wastes) produced will reduce by 27.4% with increased in Copperas generation.
This reduction is a significant positive impact to the environment.

STATEMENT OF NEEDS
The proposed PSP1 is essentially a process enhancement project which will enable Tioxide Malaysia
to utilize 84% of the world’s 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 Government’s
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

Consider to substitute the existing feedstock with a blend comprising a mix of slag and low-grade
ilmenite at a desired feedstock and optimal iron/titanium ratio. Enable the plant to process an
alternative feedstock which does not contain high grade ore while maintaining the current production
capacity. No copperas produced as co-product. However, it has impact on investment and
manufacturing costs of facility.

Option 2: Alternative Reduction Technology

An alternative reduction technology i.e. electrolysis. The implementation of this option has beneficial
environmental impacts which reduction in a quantity of red gypsum produced, reduced in volume of
effluent generated and lower gaseous hydrogen emission. However, the primary constraint of the
implementation is a time frame of no less than three years are required which is not economically
feasible.
Option 3: Full Copperas Extraction (PSP1)

Various process enhancement under PSP1 including increasing the capacity of crystallization section
which allow the plant to process feedstock containing low and medium grade ilmenite ore. With the
respect to environment impacts, the project result reduction of gypsum by 27.4%, lower the air
emission (by 5.8%).

Option 4: No-build Option

This no-build option means there will be no expansion of the project by maintain the existance process
as it is.

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%.

ENVIRONMENTAL IMPACT ASSESSMENT

The assessment of potential impacts anticipated from the implementation of the PSP 1 is
summarized below.

Air Quality

Overall, the predicted 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.

Water Quality

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.

Wastes Management

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.
Noise Impact

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.

Economic Valuation of Environmental Impacts

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.

Traffic Impact

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.

Socio-economy

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.

Health Impact

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.

Quantitative Risk Assessment

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 neighbouring 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.
Radiological Impact

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.

CONCLUSION
In conclusion, the Production Sustainability Project (Phase 1) will reduce the use of high-grade ore by
utilizing the world’s ilmenite supply as alternative to save the natural resources. Besides, this PSP1
project also can contribute to the socio-economics of State and Nation and lead to zero waste
generation and sustainable production. In order to achieve the requirements, the PSP1 will entails the
modification of process related facilities which included the installation of new equipment, upgrading
the existing equipment and utilities, build new Cooperas Storage Building and construction of new
Crystallizer Building.

The implementation of PSP1 also give benefits to the environment such as reduce air emissions to the
atmosphere by 5.8%, reduce the quantity of red gypsum by 27.4% and the boundary noise levels also
predicted to not exceed the regulatory limits. This implementation also expected to increase the
volume of treated wastewater generated up to 3.2% with no impacts to soil and groundwater. In terms
of socio-economic, this project will give advantages to the livelihood and the local community as their
main economy and industrial development of the state. The health impacts and radiological impact
assessment that have been done shows no adverse impact to the plant employees and local
community.

The Detailed Environmental Impact Assessment (DEIA) concluded the implementation of the
mitigation measures and proposed environmental management plan will not result in any significant
adverse impacts to the surrounding environment.