Lynas licence decision date set for Malaysian plant

Posted on January 5, 2012. Filed under: Pollution |

Dow Jones Newswires

LYNAS said today Malaysian authorities are nearing a decision on whether it can switch on a rare earths processing plant in the country, potentially allowing it to start operations as early as next month.

The outcome will be significant as Lynas is one of the few entities outside China proposing new mining and production facilities for rare earths. The minerals are used in renewable energy products such as hybrid cars, electronic devices such as laptops and in defence technology.

China is responsible for over 90 per cent of global production and can influence prices by changing export quotas.

Malaysian authorities have indicated the Atomic Energy Licensing Board will meet January 30 to decide whether Lynas should be granted a temporary operating license, Lynas said in a statement to the Australian Securities Exchange. The decision is then expected to be tabled to a full session of the Malaysian cabinet.

“We’re anticipating a decision at that meeting,” a Lynas spokesman said.

By early afternoon, Lynas shares were down 3.6 per cent in a weaker wider market.

Perth-based Lynas has almost completed a rare-earths refinery in the eastern Malaysian state of Pahang, where it intends to process minerals extracted from its Mount Weld deposit in Western Australia. The operations could account for up to a sixth of global rare-earths production.

Lynas’s most-recent guidance is for an expected commencement of production some time in the first quarter of 2012, back from previous guidance for the end of last year.

Rare earths typically occur in deposits that contain uranium and thorium, meaning radioactive waste is present in tailings that require safe disposal. Activists and some politicians have actively campaigned against the Malaysian processing plant, prompting authorities to ask the International Atomic Energy Agency to review the $232 million development that’s almost complete.

A report by the IAEA in June largely backed the plant, while recommending Lynas deliver a plan for dealing with its waste.

A temporary license will allow the company to ramp up production at the Malaysian facility to nameplate capacity and sell its products, Lynas said.

If Lynas complies with the strict monitoring and government oversight requirements of the temporarily license, a permanent operating licence can be issued within two years.

“The Malaysian regulatory authorities have put in place a comprehensive process to monitor and evaluate our compliance with the highest international standards and our responsibility to operate the plant in a safe and sustainable manner,” Lynas executive chairman Nicholas Curtis said.

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