The Malaysian Insider – Lynas shares slump on talk of no licence

By Melissa Chi

October 20, 2011

KUALA LUMPUR, Oct 20 – Shares of Australian miner Lynas Corp’s fell yesterday on speculation that it had been refused the licence to import rare earth for processing in Malaysia.

The Australian?newspaper reported that Lynas shares fell up to 13 per cent from after the government’s announcement before rebounding slightly to close 9.92 per cent lower at A$1.09 as the company raced to clarify the claims.

It was reported yesterday that Mike Harrowell, an Australian analyst on rare earths, said he expected Putrajaya to give Lynas an operating licence for the plant in November and that the company was “poised to deliver”.

But he said there was a risk the controversial Lynas Advanced Materials Plant (LAMP), which has raised fears of radiation pollution, would get caught up in Malaysia?s next general election, expected in 2012.

The Atomic Energy Licensing Board (AELB) yesterday denied claims it had given permission to Lynas to import rare earth ores into Malaysia, as alleged by Kuantan MP Fuziah Salleh.

In a joint statement with the Ministry of Science, Technology and Innovation (MOSTI), the regulator said Lynas was not allowed to bring in the ores without first securing a two-stage authorisation.

Fuziah last Thursday alleged that Lynas would begin shipping rare earth ores to Kuantan later this month despite not having met government requirements to do so.

The PKR vice-president said Kuantan Port Consortium had told occupants in the port area that Malaysia could expect rare earth oxides from Mount Weld to arrive in Kuantan by the end of the month.

She said this was mentioned in the monthly Health, Safety and Environment Committee meeting held this month.

This is despite Lynas not having fulfilled the 11 conditions recommended by an expert International Atomic Energy Agency (IAEA) review panel and adopted by Putrajaya.

The government has said “there will be no importation of raw materials into the country, and no operational activities will be allowed on site” until Lynas meets the requirements.

These include a comprehensive, long-term plan for waste management that extends into the decommissioning and remediation phases.

Lynas plans to process ore from its Mount Weld mine in Western Australia, at a plant in Kuantan.

Rare earths, a group of 17 elements, are not radioactive in themselves but nearly all rare earth ore deposits contain a slightly radioactive element called thorium in varying concentrations,?The Australian?reported.

According to the newspaper, Lynas, which opened its Mount Weld mine in August, the first rare earth mine in Australia, has already allocated about 70 per cent of its 11,000 million tonnes from stage one of its project.

Lynas says its plant – which will extract rare earth metals crucial for high-technology products such as smartphones, hybrid cars and wind turbines – will create multiplier effect to Malaysia of RM4 billion a year.

But critics have questioned the real economic benefit of the project, citing the 12-year tax break Lynas will enjoy from pioneer status.

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