Lynas Corp awaits key Malaysian approval for rare earths plant
The company is awaiting a Jan 30 decision by Malaysia's atomic licensing board on its application to begin commissioning a rare earths plant targeted by environmental protesters.
Author: Ross Louthean Posted: Thursday , 05 Jan 2012
PERTH -
The protracted quest for Lynas Corporation Ltd (ASX: LYC & OTC: LYSDY) to get a processing facility in Malaysia for its highly ranked rare earths deposit at Mount Weld in Western Australia will go under scrutiny at the end of this month.
The company is seeking what it originally dubbed a "pre-operating licence" but now terms a temporary licence for a Lynas advanced material plant (LAMP).
It said today it has completed all requirements for the application to the Malaysian Atomic Energy Licensing Board (AELB) and that this week the AELB had provided hard copy documents relating to the LAMP temporary licence application for public comment.
These documents will remain on display for 14 days.
The International Atomic Energy Agency review of LAMP last June took in details of waste management plan and safety case. The Malaysian Ministry of International Trade and Industry has indicated that the AELB will meet on January 30 for a decision on the Lynas temporary licence.
Lynas said the AELB's decision was then expected to be tabled to a full session of the Malaysian Government's Cabinet.
As with many rare earths projects, Lynas has spent years getting the technology and economics right, at first looking at developing an advanced material plant in Western Australia, until economics at the time showed it may not be viable.
On moving to Malaysia where there was strong support for a rare earths plant, the project hit some flak from local environmental groups and the Australian green movement, with claims that the rare earths could contain "dangerous" nuclear material.
Lynas' executive chairman Nicholas Curtis said a temporary licence would allow the company to commission the LAMP and, subject to continuous oversight by the Malaysian regulatory authorities, progressively ramp up the plant to nameplate capacity and sell its products.
A temporary licence has a duration of two years. If the temporary licence is granted, and if Lynas complies with the requirements of the temporary licence, a permanent operating licence can be issued within those two years
"The Malaysian regulatory authorities have put in place a comprehensive process to monitor and evaluate our compliance with the highest international standards and our responsibility to operate the plant in a safe and sustainable manner," Curtis said.
Lynas created some bourse interest in December when it was reported it was offloading non-core assets to Forge Resources Ltd (ASX: FRG) in a related-party deal that could see Lynas's shareholders emerge with almost 15% of Forge.
Lynas reportedly agreed to grant Forge sub-leases over the Swan Deposit and the Crown Deposit at Mt Weld and any minerals from them.
Lynas would receive A$20.7 million (US$21.3 million) cash, options to acquire 7 million Forge shares and royalties over minerals from the sub-leases.
Forge is exploring for gold and base metals in New South Wales and the Australian Capital Territory (Canberra) and also holds a grass roots mineral sands project in the Western Australian sector of the Eucla Basin.
Forge said it would also issue Lynas's shareholders $12.5m in stock at A$1.10 per share and just A$2.5 million worth of shares to Forge shareholders, also at $1.10.
Nick Curtis, who owns 15.9% of Forge and is its chairman, was excluded from the deal, along with Lynas director Jake Klein, who also owns Forge shares.
The Australian newspaper reported that shareholders of both companies are to vote on the transaction by the end of May, when Forge would also undertake its capital raising.
LYC Price at posting:
$1.09 Sentiment: Buy Disclosure: Held
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