The Malaysian High Court has extended the suspension of Lynas' temporary operating licence until early November.
The rare earths mine was initially granted a temporary operating licence (ToL) in early September.
At the time Lynas chairman Nicholas Curtis said it was a "significant milestone" for the company and would allow it to move toward first production later this year.
"Like everyone at Lynas, I am eagerly anticipating the safe commencement of operations at the Lynas Advanced Materials Plant and being able to supply our customers with product," he said.
"The approval to begin operations also verifies Lynas' continued commitment to strong safety, health, environmental and community values and highlights the company's determination to achieve its zero harm goal."
The Atomic Energy Licencing Board was set to monitor operations at the Lynas facility and the company's adherence would have been a criteria for it progressing to a full operating licence within the next two years.
However this has now been stymied as the Kuantan High Court extended the ongoing suspension of Lynas' ToL until 8 November.
The court will decide then whether Lynas’ ToL will be suspended until the judicial review applications are heard and finalised.
It had already been suspended from carrying out any plant activity, including processing of its rare earths at its Malaysian LAMP.
It comes only a month after analysts recommended investors sell shares in the embattled rare earths mine.
At the time Foster analysts said a temporary operating licence was not expected to be granted to Lynas until after the election and due to the controversy surrounding the plant there was little incentive for the Malaysian Government to approve the project.
Following this latest stumbling block Foster reiterated its stance stating that "given the current delays, we believe the core tenet of our argument to sell LYC is still applicable. Namely risks surrounding funding, dilution, commissioning and waste disposal solution".
This latest suspension was supported by anti-Lynas group Stop Lynas (SMSL) Save Malaysia).
"A month of extended suspension of the ToL is another month of temporary relief for the Stop Lynas campaign. At least we have now dashed Lynas’ hope of operating in October," SMSL spokesperson Tan Bun Teet stated.
The group will continue in its legal action against Lynas, saying that “Rakyat will not rest as long as we know the Lynas rare earth plant remains a threat to our peaceful and healthy living environment. We will fight till the end to get rid of this controversial project out of our lovely town".
In August the group managed to have the court revoke the ToL granted by the Atomic Energy Licencing Board, and have now engaged a German consultancy firm, Oeko Institute, to provide an independent third party review on the LAMP.