Lynas Rare Earths shares surge after Malaysia backs off plans to cancel company’s import licence
Lynas has won a major victory in Malaysia, where the government has allowed the rare earth producer to keep importing rare earth concentrate.
Lynas shares surged on Tuesday after the Malaysian government backed down from plans to force Lynas to move its early stage rare earth processing offshore, extending the company’s right to import raw materials from Australia ahead of a court showdown over the issue in November.
Lynas shares jumped 75c, or 12.4 per cent, to close at $6.82 after the company said on Tuesday it had been granted an extension of its operating licence in Malaysia until March 2026 – including the right to import rare earth concentrate from its WA mine.
The Malaysian government had previously sought to cancel that right, over running concerns over the radioactive residues created by the cracking and leaching plant that processed the concentrate.
Lynas had issued a legal challenge over the cancellation of that part of its licence, and said in its quarterly production report released last week, it had been granted leave to appeal the decision by the Malaysian High Court, with a hearing likely in November.
The Malaysian government now appears to have backed down from its previous stance, issuing Lynas with a variation to its operating licence on Tuesday, including the right to import concentrate containing the naturally occurring radioactive materials.
Lynas gave no reason for the decision on Tuesday, saying only that it would double its research and development efforts in Malaysia, agreeing to spend 1 per cent of its gross sales on research directed at developing methods for removing radioactive materials from the waste stream created by its Malaysian cracking and leaching plant.
The company had already said it planned to push ahead with plants to expand its downstream processing to allow the production of about 10,500 tonnes of neodymium and praseodymium a year.
Lynas managing director Amanda Lacaze said the decision provided a “strong foundation for further development of the Malaysian rare earths industry”.
“Lynas deeply values our people and communities in Malaysia who recognise that Lynas Malaysia is an excellent employer and a safe and responsible community member, as demonstrated by our over 10 years of safe operation,” she said.
The ban on importing concentrate into Malaysia was due to come into force from January 1, and the backdown removes the threat of a potentially significant production curtailment for Lynas, which was rushing to try to complete construction and commissioning of a new cracking and leaching plant in Kalgoorlie in WA – a project that is badly behind schedule and significantly over budget.
Last week Lynas flagged a significant slowdown in production in the current quarter as it reconfigures the bulk of its solvent extraction circuits as part of the expansion of its Malaysian refinery.
The company said it would close the production lines in mid-November to allow the upgrade the facilities – and also free up some workers to assist with the commissioning of the new processing plant in WA.
Lynas said it plans to conduct additional maintenance on its Malaysian cranking and leaching plant if it won the right to continue to import concentrate from its Mt Weld mine.