Legal woes move from bad to worse for Lynas

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In more bad news for Lynas Corporation, the company is facing being stripped of its claim to rare earths tenements in the small African nation of Malawi.

In an update to the ASX yesterday Lynas said its Kangankunde tenements, potentially worth billions of dollars, were in dispute in the nation’s High Court.

In December 2010 Lynas announced it had received approval from the Malawi Government to acquire the Kangankunde Carbonatite Complex (KGK).

Lynas says under the Government approval it was recognised as “the registered legal owner” of the mining license for the KGK project.

But in a statement yesterday the company said a different party was moving to argue the Malawi Government’s KGK approval for Lynas was invalid.

“Lynas has recently received correspondence on behalf of a party claiming that, in 2003, the Government of Malawi acted incorrectly in not renewing that party’s exploration license over the area of the KGK tenements,” it said.

Lynas said the party had made “various claims” to the Government over the KGK license, including particular claims about the validity of the Lynas mining license.

Lynas said it was “not currently a party” to proceedings on the matter.

According to the Sydney Morning Herald South African geologist Michael Saner is vying for the rights to the rare earth deposit.

Saner controlled the exploration license for the project in 2003 and claims the transferral of KGK rights to Lynas was unlawful.

The legal stoush is the latest problem for Lynas, which is facing significant community opposition to the development of its rare earth processing plant in Malaysia.

Yesterday Malaysian Insider reported the country’s international trade and industry minister had reprimanded Lynas for trying to pre-empt its approval process.

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