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Lynas Corp. (LYC), an Australian miner, said it’s been “very seriously” impacted by delays in being issued with a refining license in Malaysia where the first phase of the world’s biggest rare-earths plant is nearing completion.
“We are ready to fire in about a fortnight,” Mashal Ahmad, Lynas Malaysia Sdn.’s managing director, told reporters touring the refinery in Southeast Asian nation’s eastern Pahang state yesterday. “We cannot delay our production because our customers are waiting for our product.”
The Sydney-based company, which Mashal said has already spent 1.5 billion ringgit ($489 million) on construction and equipment, can’t start importing raw materials from its Mount Weld mine in Western Australia until it’s issued with a permit by Malaysia’s Atomic Licensing Energy Board. The authority agreed to grant a temporary operating permit in February subject to certain conditions, though this has been held up due to appeals by protestors to government and in court.
Malaysia won’t let Lynas operate if there is scientific proof that it’s hazardous, the Malaysian Insider reported on March 22, citing Prime Minister Najib Razak on the Chinese- language radio station 988FM. Opposition leader Anwar Ibrahim said on Feb. 26 that his People Alliance coalition would scrap the project if it wins the country’s next general election, due by early next year.
“Yes, we will scrap the plant,” Fuziah Salleh, an opposition member of parliament for Pahang’s capital Kuantan, said in a text message to Bloomberg News. “We have the political will to do so.”
Rare earths, 17 chemically similar elements, are used in Apple Inc.’s iPod music players, flat-screen televisions, magnets and hybrid cars.
Lynas’s Pahang plant would be the world’s largest refinery of the minerals with total capacity of 22,000 tons per year should a second phase be approved and completed, the company said on Nov. 16. The miner, which has seen its shares slide 50 percent in Sydney over the past year, plans to spend a total 2.5 billion ringgit on the two phases, Mashal said.
“For phase one, we have sold out 100 percent for the next 10 years,” he said. “This delay has impacted Lynas very seriously.”
It wanted to start production in September last year. This was delayed after the government imposed extra safety standards recommended by an international review panel after residents expressed fears over possible radiation and contamination.
Maximus Ongkili, Malaysia’s minister of science, technology and innovation, heard an appeal this week by protestors concerned over health and safety issues. The minister said on April 17 he would announce the results of his review “as soon as possible” after consulting experts and relevant authorities.
The miner maintains that the plant is safe. It doesn’t plan to permanently store waste on site and has found a way to commercialize it by turning into hard-core for use in road construction and car parks, Mashal said.
The licensing board said in February that a temporary license would be subject to certain conditions, including a plan for permanent waste disposal.
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