Rare Earth Miner Lynas Hit by Malaysian Permit Rumours

Posted in Industry News on 24th October 2011 |

Rare earth miner Lynas's shares slumped last week on speculation that the Malaysian authorities would not grant an import license for ore from its mine in Western Australia.

Following a statement by protestors that ore shipments were due to commence, Lynas reassured local residents that it was still working with the government to obtain a pre-operating licence before it could proceed with imports. The Malaysian authorities also issued a statement to confirm that Lynas had not yet been given permission to import ore.

Lynas plans to process ore from its rare earth mine in Western Australia at a production facility in Kuantan, central Malaysia. Many locals oppose the plant due to radioactivity concerns associated with rare earth metals and problems with the Mitsubishi refinery which closed in 1992. In response, the Malaysian government commissioned an International Atomic Energy Agency (IAEA) review of the processing plant which found that it complied with international safety standards but some work needed to be done before the next licensing stage, including improving relations with the local community.

The plan was that once Lynas fully complied with the IAEA report, the Malaysian government would grant an import licence and the Company are confident of being in production by the end of the year.

This news follows last month disclosure by Lynas that pre-production operating costs had risen at the Malaysian plant but that "Lynas has received all required approvals to construct the Lynas advanced materials plant, and is in the process of applying for all pre-operation and operation approvals".

Rare earths are a group of 17 elements, which are not radioactive themselves and are used in products ranging from electronics to light bulbs and in foundry raw materials like Magnesium Ferro Silicon and Rare Earth Silicide. However, the majority of rare earth ore deposits contain a slightly radioactive element called thorium in varying levels.

China controls more than 95 per cent of global production and Lynas' Mount Weld mine is the first rare earth mine in Australia, located 35 kilometres south of Laverton, Western Australia. The first mining campaign was completed in June 2008 and mined 773,300 tonnes of ore, with an average grade of 15.4% Rare Earths Oxide (REO).

Tags: Asia, Australia, Cerium Mischmetal, Lynas, Magnesium Ferro Silicon Nodularisers, Malaysia, Rare Earth Silicide, Rare Earths