July 1, 2011
PERTH: SHARES in rare earths supplier Lynas plunged by 9 per cent on today as the company denied reports its Malaysian plant was delayed.
“We have received confirmation from the Malaysian government that no spokesperson for the government stated a one to two-year delay as quoted by some media articles,” a statement by Lynas said just after the market opened on Friday.
This morning shares in Lynas had fallen by 17 cents, or 8.59 per cent, at A$1.81.
Lynas’s denial of the media reports followed a report by the International Atomic Energy Agency (IAEA) on the Lynas Advanced Materials Plant (LAMP) in Kuantan.
The IAEA report confirmed that the Malaysian plant was safe and fully compliant with international standards, but it required Lynas to provide a waste management plan before a pre-operational licence is granted.
Lynas said on Friday that the IAEA had validated Lynas’s approach to make community and operational safety paramount.
“Not only did the IAEA confirm that we comply with international standards but, importantly, that we have acted in accordance with our own values,” Lynas said in a statement.
“The IAEA report specifically mentioned that Lynas has an obligation to do more for the Kuantan community.
“We acknowledge that not enough has been done to engage with the community and we will correct that now.”
Lynas said that, as a result of the IAEA recommendations, much remained to be done before a pre-operating licence was granted.
“Lynas is confident that completion and commissioning of the plant will be achieved before the end of 2011,” the company said.
“In addition, there will be ongoing work after the grant of the pre-operating licence to comply with the IAEA recommendations, and Lynas will undertake that ongoing work.”
The plant in Malaysia is being built to process ore concentrate from Lynas’s rare earths deposit at Mount Weld near Laverton in Western Australia.
Lynas said the confusion over the reported one to two year delay may have been caused by a reference in the IAEA report that it would revisit the issue in one to two years.
“The schedule impact of meeting the requirements of this report is estimated to result in commissioning being completed by the end of 2011, with full production capacity of Phase 1 of the LAMP achieved by the start of the second half of 2012,” Lynas said in a statement, as its share price began to dive.
“Lynas does not believe the schedule for Phase 2 will be impacted.”