Lynas gets Malaysian rare earths plant going

After months of polemic and legal battles, Australian rare earths miner, Lynas (ASX:LYC), has finally begun production at its Malaysian processing plant following a recent court triumph.

The company said Friday that the first rare-earth concentrate had been fed into the kiln at its Lynas Advance Material Plant (LAMP) in Kuantan.

"This is a significant milestone," executive chairman Nicholas Curtis said in a statement. "The operation of the LAMP is now a reality, and the LAMP will provide real data that will assure people that the LAMP is entirely safe for our local communities and the environment."

But investors didn’t seem to welcome the news, as Lynas shares sunk 5.19% on Friday’s trade in Sydney to 64 cents, against a benchmark index rise of 0.63%.

LAMP's start was long-delayed because of ongoing strong opposition from locals based on potential health and environmental threats.

Critics of the project believe that allowing the $230 million refinery will jeopardize Malaysia’s well being and pollute the surroundings. Supporters argue that the plant can help stabilize rare earth prices, as it is the first in years outside China. The country, which currently supplies about 95% of the world's rare earths, has restrictions on those exports.

In September a Malaysian court dismissed an application by the Save Malaysia Stop Lynas group to block Lynas's operating licence, but legal challenges are ongoing.

Hon Kai Ping, a lawyer representing the activists, said a higher court had fixed February 5 to hear an application to revoke the Australian miner's licence.

Only last week, 10,000 people marched bare feet in the capital Kuala Lumpur to protest the opening of the refinery.

Lynas has said that by early 2013 the plant will be able to supply 22,000 tons of rare earth concentrates per year.

Image: Demonstrators during a protest in Kuala Lumpur against the plant. By Ali Mufti /