Lynas presses Malaysian authorities to explain plant review status

Rare earth production line at Lynas’ plant in Kuantan, Malaysia. (Image taken from Lynas’ presentation)

Rare earths producer Lynas Corporation (ASX:LYC) is asking Malaysia to clarify whether a review will be conducted into the company’s refinery as speculated in local media in recent weeks.

In an open letter seeking information and fair treatment from the Asian nation, chief executive and managing director, Amanda Lacaze, said Tuesday that Lynas’ operations have been built on a zero-harm philosophy – “zero harm to our people, zero harm to our communities and zero harm to our environment.”

She noted that independent monitoring not only confirm the companies’ facilities are environmentally sound, but also that they comply with their license conditions. “We work closely with the Malaysian regulators to identify ways to continuously improve our operations,” Lacaze added.

While the Australian miner has yet to receive an official notification of the alleged assessment, Fuziah Salleh, a government politician and a long-standing critic of Lynas’ plant, responded to Lynas’ open letter by promising that any review will be “open and transparent.”

While the Australian miner has yet to receive an official notification of the upcoming assessment, the chairwoman of the review committee said it would centre on the company’s Radioactive Waste Management Plan.

Salleh, who according to Malaysian paper The Star Online will chair the committee in charge of reviewing the refinery, promised the panel will ensure the policies of the present government on sustainable development are being adhered to.

“Central to the review will be the Radioactive Waste Management Plan (RWMP) since the radioactive waste is a very pertinent issue to be deliberated by the committee from the perspective of sustainability and sustainable development,” Salleh said.

“It will be also looking at safety, health, social and environmental impacts of the plant,” she added.

Lynas’ supporters and other stakeholders, including the Malaysian Chinese Association (MCA), questioned Salleh’s ability to be fair and neutral, considering she had been openly against the company’s operations in the country for the past 10 years.

“Fuziah will be pressured to defend her dignity and accountability as well as the trust placed in her to keep her promise to stop Lynas operations as well as to ensure that the industrial waste (from Lynas operations) be sent back to Australia or some other country over claims that the waste is toxic,” MCA spokesman Datuk Seri Ti Lian Ker said in a statement quoted by The New Straits Times.

“Therefore, her appointment as head of the committee raises questions… any decision which is not in favour of Lynas would be questioned and considered biased,” he noted.

The six-year-old facility — known as the Lynas Advance Material Plant (LAMP) — was the centre of relentless attacks from environmental groups and local residents while under construction in 2012. They feared about the impact the low-level radioactive waste the refinery generates could have on the health of those living nearby and the environment.

Lynas is the only major rare earths miner outside China. The metallic elements, crucial in the production of magnets, are extracted in Western Australia, but processed in Malaysia.

The company’s operating license in the country is up for renewal in September next year.

Concerns that the newly-elected coalition government could close down the plant triggered a massive sell-off last month, with the stock losing 23% of its value to trade at A$1.61, its lowest in a year.