By Shannon Teoh
January 23, 2012
KUALA LUMPUR, Jan 23 – Australian miner Lynas Corp is expected to receive A$100 million (RM325 million) in fresh funds today to keep operations going while awaiting clearance to fire up its controversial RM2.5 billion rare earth plant in Kuantan.
The plant was due to start operations in September but Putrajaya has asked for additional measures following a continued protest against the rare earth refining facility.
“The trading halt is requested pending an announcement concerning a funding transaction for the company,” Lynas said in a letter today to the Australian stock exchange this morning.
Reuters reported that analysts estimate the Australian miner would need up to A$100 million to tide it over ahead of a January 30 meeting by Malaysian regulators on whether to approve a pre-operating licence for the refinery being constructed in the Gebeng industrial zone.
The Atomic Energy Licensing Board (AELB) will submit its recommendations to the Cabinet but with a general election due by May 2013, continued protests by local residents and environmentalists may further delay any decision by the government.
Putrajaya bowed to public pressure last April after sustained opposition from local residents and environmentalists and put the project on ice pending the review by the International Atomic Energy Agency (IAEA).
In July 2011, the government agency adopted 11 recommendations set out by the review of the refinery and said it would not allow Lynas to begin operations or import rare earth ore until all conditions, which include a comprehensive, long-term and detailed plan for managing radioactive waste, are met.
However, AELB had said Lynas Corp failed to meet any of the conditions in its first proposals.
Lynas’ local subsidiary has insisted that it can begin operations within six weeks of being given the go-ahead for the plant which it hopes will provide a windfall of RM8 billion annually from 2013.
In an interview with The Malaysian Insider, Lynas Malaysia managing director Datuk Mashal Ahmad said the plant already has agreements to supply BASF and Siemens with rare earth, crucial in high-tech applications like magnets for wind turbines and hybrid cars.
Lynas shares closed last Friday at A$1.28, valuing the company at A$2.2 billion.