Lynas Corporation has welcomed comments made by Malaysian Prime Minister Mahathir Mohamad regarding the renewal of the company’s contentious rare earth processing plant near Kuantan, Malaysia.
Mohamad said the company’s Lynas advanced materials plant (LAMP) near Kuantan, Malaysia would likely receive renewal to operate this year.
“We will allow Lynas to carry on because otherwise we are going to lose a very big investment from Australia,” Mohamad said at the 25th International Conference on the Future of Asia conference in Tokyo, Japan yesterday.
Lynas today responded to the comments, stating: “We welcome the Prime Minister’s comments acknowledging the importance of the continuation of the Lynas operations in Malaysia. We will update the market as we receive further clarification from the Malaysian Government.”
The Prime Minister’s comments were the clearest sign yet of the Malaysian Government’s plan to renew the $US800 million ($1.1 billion) plant, which has been blighted by environmental concerns related to the storage of toxic waste created as a byproduct through processing of ore shipped from Lynas’ Mt Weld mine in Western Australia.
The Lynas plant requires renewal from the Malaysian Government by September 2019.
A reporter had asked Mohamad if the Malaysian Government was satisfied with Lynas’ plans to build a processing plant in Australia as part of a $500 million growth plan, and whether or not the government would renew the LAMP.
Mohamad highlighted Malaysia’s previous bad experiences with radioactive products that result from the use of activated tin mining byproducts used to manufacture old-style colour televisions.
The process resulted in a requirement to bury the waste once the televisions eventually became outmoded by newer LED-style TVs.
“Since Lynas produces radioactive material, we wanted them to ship out the material back to the country where the raw material comes from,” Mohamad said.
“The country doesn’t want to accept it but we are going to talk to them. If we fail, of course, we need to do something with the raw material — maybe spread it so we don’t have concentrated material in one place.”
Mohamad’s comments remove a degree of uncertainty surrounding the project’s renewal. He indicated in April that other companies were willing to acquire Lynas, and that this company had promised to decontaminate its raw materials in future before sending them to Malaysia – a veiled reference to Wesfarmers’ $1.5 billion takeover attempt .
Wesfarmers announced its intention to buy Lynas in March, an offer that was subject to conditions related to the renewal in light of what Wesfarmers called Lynas’ “regulatory uncertainty”.
Lynas rejected the offer, which it referred to as “highly opportunistic”, before announcing a new joint venture (JV) in the United States with Blue Line Corporation and aforementioned growth plan in May.
Mohamad also commented on the status of the ongoing trade war between the United States and China that has seen REE prices escalate significantly in recent months.
“At the moment we have to accept that the Asia trade war affects us, because we want China to be rich enough to be a great market for us and the rest of the world,” he said.
“China has 1.4 billion people — very productive people — and they definitely can become a very big market for the whole world.”