Neville D’Cruz, Bernama
11:33AM Jan 19, 2012
Lynas Corporation shares surged 3.8 percent as investors speculated that the rare earths miner will be granted the green light for the lucrative Malaysian venture.
Lynas impressed the market this week when it upgraded its resources estimate for its Mt Weld project in Western Australia by 37 percent.
The news sent its shares surging 4.4 percent to A$1.06 yesterday.
The Australian Associated Press said dealers are hoping that Malaysia’s Atomic Energy Licensing Board (AELB) will approve plans for the company’s processing plant in Kuantan, Pahang, in a move that analysts say could more than double its share price.
Submissions on the plant are due by next week.
The RM1.5 billion plant is already 85 percent complete but has faced strong opposition from community groups, who fear a repeat of health problems associated with a Mitsubishi refinery that closed in 1992.
The AELB is due to meet on Jan 30 to decide on the temporary licence.
Deutsche Bank research analyst Levi Spry gave a price target of A$2.42, noting that much of the company’s funding base was contingent on the granting of the temporary licence, which would be valid for two years.
“We factor in late February for the plant completion and the granting of a temporary licence,” he said in a statement.