Malaysian election pushes Lynas shares up

Shares in Australian rare earths miner Lynas Corporation have risen following the re-election of Malaysia's coalition, reducing uncertainty around further regulatory hurdles at its controversial plant.

Malaysia's opposition party has previously said it would consider reviewing Lynas' permit for the Kuantan plant because of local concerns that it might pose an environmental hazard.

The company’s shares closed up 16 per cent on Monday at 58 cents, but have fallen almost 80 per cent since hitting a peak of $2.60 in April 2011, SMH reported.

JPMorgan resources analyst Mark Busuttil said the re-election meant Lynas’ regulatory issues had ''significantly diminished''.

''Now I think the market can focus on the underlying business of the company, which is the commissioning and ramp-up of phase one and two of the [Lynas Advanced Materials Plant] and the state of rare-earths markets.''

Busuttil said Lynas' commissioning appeared to be on track, with the company expecting to reach phase one by the end of this quarter.

''So things seem to be going in the right direction for the company,'' he said.

Lee Tan, technical adviser to the main Malaysian group campaigning against the plant ''Save Malaysia, Stop Lynas'', said the election defeat would not stop to the group’s agenda.

 ''We have yet to work out what chances there are for us to do anything in Malaysia to shut down the plant,'' Tan said.

''But the 'Stop Lynas' campaign is more international and we'll be campaigning a lot more on the customer side.''

Lynas began production at its $900 million rare-earths plant in December after environmentalist’s legal action resulted in extensive delays. To date, Lynas has managed to fend off protester’s claims and legal challenges.

Earlier this month Australian Mining reported Lynas was on track to meet its second quarter target of producing 11,000 tonnes per year from its processing plant.

Lynas was unavailable for comment on the election’s affect at the time of publication.

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