Lynas wins licence for Malaysian rare earths plant

Lynas has been issued a temporary operating licence for its Lynas Advanced Materials Plant in Malaysia, ending months of uncertainty over the company’s timetable to bring refined rare earths to market.

Local groups have held protests during the construction of the plant, the first phase of which was completed in August, and raised concerns over the treatment and storage of process residues at the site, fearing a repeat of the environmental and health problems associated with a Mitsubishi Chemicals rare earths plant that operated in the country until 1992. 

The Malaysian Atomic Energy Licensing Board will monitor the plant’s adherence to safety standards as a condition of the operating licence, Lynas said in a statement on Wednesday September 5. It expects the board to issue a full permit within two years.

“Lynas will […] exceed the rigorous standards incorporated into the temporary operating licence by removing from Malaysia the material that is the principal cause of the community anxiety by engaging with export markets for the processed co-products from the [Malaysian plant],” Lynas said.

The licence is the key to Lynas’ plans to refine rare earths concentrate produced at its Mount Weld mine in Australia, which has been in operation since May last year.

At the end of the second quarter of this year, more than 13,000 dry tonnes of concentrate were stored at the Mount Weld site, containing more than 4,800 tonnes of rare earth oxides. In comparison, China’s rare earths export quota for the whole of 2012 is 30,996 tonnes.

Lynas expects to deliver the first shipment of concentrate to the Malaysian plant in October, bringing the company a step closer to commercial production.

Delays in permitting at the Malaysian plant have hobbled Lynas in the race to develop rare earths production assets outside China, and its Australia Stock Exchange-listed shares have dropped 66% from levels seen a year ago, when the outlook for rare earths was more buoyant. 

Since then, Molycorp has brought its Mountain Pass mine on line in California, while demand has fallen markedly in consumer markets in Europe and Asia throughout the year, contributing to a sharp drop in prices. 

During the second quarter, Lynas’ basket price for rare earths produced at Mount Weld dropped to $63 per kg, down 32% from the first quarter and 64% from prices a year ago.

Mark Burton
mburton@metalbulletin.com
Twitter: @mburtonmb