Lynas faces claims against rare earths plant licence

(Malaysian Insider) – Opponents of Australian rare earths miner Lynas Corp’s refinery in Malaysia have asked a court to delay start-up of its A$200 million (RM640 million) plant and review the government’s decision to give it a temporary operating licence. Lynas said today it would fight the claims, as it aims to open the plant, which is nearly complete, by June.

The move, potentially further delaying start-up of the plant, sent Lynas shares down 3.5 per cent in a flat market. The case has been launched by a group of people who live in Kuantan where the plant is being built, the company said.

“While Lynas respects the concerns of members of the community, it does not believe that there is any basis for the claims made in the proceedings,” it said in a statement to the Australian stock exchange.

“Lynas will take the necessary steps to vigorously protect its interests in relation to the orders sought in the proceedings.”

The Malaysian plant will process rare earths mined in Australia at Lynas’ Mount Weld project. The operation is key to offsetting China’s dominance of the supply of rare earth metals, crucial in a range of products from smartphones to wind turbines.

Japan is counting on Lynas to supply 8,500 tonnes a year of rare earths by early 2013 to curb its reliance on China, under a deal involving trading house Sojitz Corp and state-run Japan Oil, Gas and Metals National Corp.

Malaysia’s Atomic Energy Licensing Board approved a two-year operating licence for Lynas in early February, on condition it would submit a detailed plan for a permanent disposal facility for waste from the plant within 10 months. Lynas shares jumped 20 per cent on that news.

But Malaysian residents and local politicians are worried that radioactive waste from Lynas’ plant could contaminate the environment.

Protests last year led to an investigation by the International Atomic Energy Agency, which issued a favourable report on Lynas but ordered it to provide a long-term waste management and safety plan.

Opponents have raised concern the government did not give the public enough time to examine and comment on Lynas’ safety plan before the Atomic Energy Licensing Board granted the temporary operating licence.

Lynas has said its plant is safe and is not comparable to a rare earths plant in Malaysia that was shut by a unit of Mitsubishi Chemicals in 1992 after residents there blamed the plant for birth defects and a high rate of leukaemia cases. — Reuters