Lynas faces licensing hurdle
AUSTRALIAN rare earths miner Lynas Corporation remains positive it can reach “an appropriate outcome” after stringent environmental demands were made for its Malaysian processing operations’ license renewal.
Lynas owns the Mt Weld rare earths mine in WA, and the Lynas Advanced Materials Plant (LAMP) in Malaysia – one of the largest and most modern rare earth separation plants in the world.
In December, a statement from Malaysia’s Minister for Energy, Science, Technology, Environment and Climate Change ( MESTECC) expressed concerns over Lynas’ processing plant site and set new conditions for the company to meet ahead of its license renewal in September 2019.
Conditions included the export of Water Leach Purification (WLP) residue and the submission of an action plan on the disposal of Neutralization Underflow Residue (NUF), as current approval was only valid until February.
In a statement, Lynas said the preconiditions were inconsistent with the Review Committee’s recommendation released the same day, that Lynas Malaysia should determine the location of and build a permanent disposal facility (PDF) for the WLP residue.
“The potential construction of a PDF for WLP residue has always been part of our planning,” the company stated.
“It is provided for in our financial statements and by way of the PDF bond in excess of $US34 million that is held by the Malaysian regulator.
“Lynas’ license conditions explicitly state that residues should be recycled, and if that fails, then they should be stored in a PDF. Export should only be considered if a PDF is not possible.”
Lynas said it was one of a number of industries in Malaysia with feedstock that produces residues with low level radioactivity, and there should not be one rule for other industries and one rule for Lynas.
“We will consider all options available to us to achieve an appropriate outcome prior to 2 September 2019, including legal options,” it stated.
Lynas’ share price dropped by about 26 per cent after the conditions were set.
The Review Committee report on Lynas’ operations was also released on 4 December, which was drafted after an extensive tour of Lynas’ operations, reviewed data from Lynas’ monitoring, relevant regulators and peer-reviewed research, and meetings with regulators, independent experts and local community members.
The report concluded Lynas Malaysia’s operations were low risk and compliant with applicable laws.
“We thank the Review Committee for its diligent and thorough approach,” Lynas chief executive and managing director Amanda Lacaze said.
She added the company was surprised with the Ministry’s decision to impose the pre-conditions, and they were inconsistent with the science, international best practice as well as with the expert Review Committee’s recommendations.
“This appears to be policy based on politics, not policy based on science. It is very disappointing to receive this on the same day that the Review Committee report was released,” she said.
“However, we are confident we are well placed to manage potential changes and our long term investment thesis remains strong.”