I am sure many of you have read this. Just in case you missed...

I am sure many of you have read this. Just in case you missed it. Here it is :
http://www.afr.com/f/free/markets/capital/cfo/remedying_lynas_toxic_relationships_hXfT1M477h9yXH30m8ApFL

Remedying Lynas’ toxic relationships
PUBLISHED: 27 Mar 2013 00:35:06 | UPDATED: 27 Mar 2013 00:35:06


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Remedying Lynas’ toxic relationships
A guard at the site of Lynas’ Advanced Materials Plant near Kuantan in Malaysia. Photo: Goh Seng Chong/Bloomberg

Sally Rose

Malaysia memo
?The National Front alliance, led by UNMO, has held power since Britain granted independence in 1957.
?In 2010, opposition leader Anwar Ibrahim faced trial over false sodomy charges.
?The Malaysia-Australia Free Trade Agreement was signed in May 2012.
?Muslim Malays are in the?majority, with Chinese, Indian, Buddhist, Hindu and Christian minorities.
?Prime Minister Najib Razak is due to call an election before the end of April, to be held by June.
?Independent South Australian senator Nick Xenophon was detained at Kuala Lumpur airport in February 2013 and subsequently deported. The?aim of his trip was to meet with Ibrahim to discuss the integrity of the country’s electoral system.

Luisa Catanzaro was sceptical when a consultant rang in late 2011 about a job with rare earth miner Lynas in Malaysia. She was conscious of the Save?Malaysia! Stop Lynas campaign and its accusations the Australian company was “exporting?a toxic legacy”.

But after meeting with chair Nick Curtis, Catanzaro, the former CFO of Dairy Farmers and Australian Agricultural Company, was convinced Lynas’ safety and compliance credentials were solid. What was toxic was the state of community relations. This has made the investor relations portion of her role as CFO more challenging.

“Banks do ask quite a few questions about how it is being handled,” she says.

In 1992, Mitsubishi Chemical’s Malaysian rare earths processing plant was shut down after it was found to be polluting the water with radioactive material and was linked to cases of leukaemia. A?legacy of this was the establishment of the Malaysian Atomic Energy Licensing Board.

“Ironically, Lynas thought an established regulatory framework would reduce operational risk,” Catanzaro says. In late 2007, Lynas won the first of several approvals to build the facility. Another incentive was Malaysia’s support of direct foreign investment: the Lynas Advanced Materials Plant has a 12-year tax exemption.

But the company failed to appreciate the enduring level of community concern about the industry and how, in a politically charged environment, this would lead to costly delays. Originally scheduled for October 2012, the plant did not begin operating until January 2013. In the interim, the share price suffered and Catanzaro had to pull together an unplanned $175 million equity raising to fund working capital.

Simmering protests against the plant had boiled over in the wake of the Fukushima nuclear disaster in March 2011, and Lynas struggled to engage. Catanzaro believes the project has also been a lightning rod for Prime Minister Najib Razak’s political opponents in the lead up to an election because it is located within his seat.

The opposition has recently sought to distance itself from the most prominent protester, Wong Tack, after he threatened to burn down the plant.

In retrospect, Lynas should have spent more time meeting with lobby groups and community leaders, says Chic, silver-haired, with a lean muscular build honed by her love of fencing, Catanzaro, who is also the director of Artereal, a contemporary art gallery in the inner city Sydney suburb of Rozelle and is a long-time collector and benefactor of the arts.

She says one mistake was outsourcing communications to an agency and trying to manage the public relations process out of the Sydney office. An internal Malaysian communications manager was only appointed in October. “Given the time over, I would have made sure we did that much earlier.”