Malaysia renews Lynas rare earth plant licence
Lynas shares fell after conditions were placed on a six-month extension for its rare earths plant in Malaysia.
Rare earths producer Lynas Corporation has won a stay of execution from the Malaysian government, with its licence to operate extended for an initial six months, with conditions.
The renewal of Lynas’s licence comes despite concerns from Malaysian green groups about the impact of radioactive waste it produces.
Lynas hopes its plant, which has processed rare earths from Australia since 2012, can reduce Chinese dominance in the market for the materials.
Lynas shares fell 13c or 4.9 per cent to $2.55 in early trading after it said further licence extensions are dependent on it moving some of the early stage processing of its rare earth ore to Western Australia, in line with previously announced plans to build a cracking and leaching facility either at its Mt Weld mine or near Kalgoorlie.
Under the new licence, Lynas will need to complete that shift within four years, and build a permanent storage facility in Malaysia for waste gypsum residue produced from its existing operations - or find another country prepared to accept the waste.
Malaysia’s Atomic Energy Licensing Board said the condition was imposed as a result of the Australian federal government, and the West Australian government, saying they would not accept the return of the waste to Australian.
“After the cracking and leaching facility starts operating overseas, the licence holder is no longer allowed to produce radioactive residue exceeding 1 becquerel per gram in its plant in Gebeng, Kuantan,” the AELB said in a statement overnight.
Lynas managing director Amanda Lacaze thanked the Malaysian government for the extension, saying the company remained committed to operating in the country.
“We reaffirm the company’s commitment to our people, 97 per cent of whom are Malaysian, and to further developing Malaysia’s position as a global rare earths centre of excellence,” she said.
“We hope today’s decision will encourage other international businesses to invest in downstream manufacturing in Malaysia. Over the past seven years we have demonstrated that our operations are safe and that we are an excellent foreign direct investor.”
Ms Lacaze said she hoped the decision would bring an end to the “politicisation” of the company’s operations, saying it was based on the scientific recommendations of the executive review committee the Malaysian government set up to consider Lynas’ operations.
Rare earth minerals are used in everything from missiles to mobile phones, and Lynas is the only major producer of them outside China.
But environmentalists and the political opposition were against the plant due to health fears related to the waste.
The Malaysian opposition launched a review into the plant following a shock election win last year, but the atomic energy licensing board announced the Kuantan factory’s licence had been extended for six months, with several conditions.
The factory, on peninsular Malaysia’s east coast, had been due to lose its licence on September 2.
The licence renewal had appeared assured after Prime Minister Mahathir Mohamad last week said Lynas could not be forced out of Malaysia as it would send a negative message to foreign investors.
“We invite them (to invest) and then we kick them out. Others will say the country made a promise but, when there is a problem, we kick them out... we cannot do that,” he was cited as saying by official news agency Bernama.
He also said that 600 workers would lose their jobs if the plant closed.
With AFP