politicization of rare earths and lamp's

http://www.raremetalblog.com/2012/08/lynas-and-the-malaysian-election-the-politicization-of-rare-earths-and-lamps-chances-of-success.html

Lynas and the Malaysian Election: the Politicization of Rare Earths and LAMP's Chances of Success
The Australian Lynas Corp (Lynas, ASX: LYC) is facing opposition from the ‘Save Malaysia Stop Lynas’ (SMSL) NGO, which has targeted the Company’s rare earths processing facility, the Lynas Advance Materials Plant (LAMP), in Pahang in Malaysia. Malaysia’s political opposition leader, Anwar Ibrahim, said he would scrap the Lynas facility should his party coalition win the next and forthcoming election. Lynas should be faulted for underestimating the power and influence of social media in Malaysia and beyond. Malaysia has also developed a penchant for establishing non-governmental organizations (NGOs); this is a good thing as it reflects a country whose citizens are dedicated to participating in a democracy. Nevertheless, some NGO’s have been rather deceptive in their effort to gain a following by producing uncorroborated and disingenuous accusations against perceived threats. The accusations are often presented as expressing the interests of large groups even when they represent small minorities or their very own narrow interests veiled in a package of perceived social and environmental threats. While freedom of speech is sacrosanct in a democracy, it can sometimes spill over the boundaries of fact and into those of fiction and dishonesty in order to drive a point.

This would not be too problematic if the wide array of media, print and especially social electronic media were so quick to publish claims without verifying the facts or analyzing and scrutinizing the content. The publication Free Malaysia Today did just that when it published claims by the shills at SMSL, who claimed that LAMP was unsafe. The publication eventually issued an apology last July, noting that its claims had no scientific basis. SMSL is still at large. Lynas has endured negative publicity for more than a year, but the reputation damage done to NGO’s will last longer.

The election date has not been established, by law they must be held before April 2013, but the country has entered full campaign mode as the ruling Barisan National (BN) coalition will have to face off against the official Pakatan Rakyat (PR) opposition led by Anwar Ibrahim, who is trying to win votes by playing on the fears generated by SMSL, saying that he would scrap the Lynas facility should his party coalition win the next and forthcoming election. Lynas has obtained a temporary operating license from the Malaysian Atomic Energy Licensing Board in February 2012. Given the electoral climate and the PR’s raising of the stakes with its Lynas move, the Malaysian Government will be reluctant to issue Lynas an Operating License before the vote. The PR has been put in a position to hide its generally favorable stance toward Lynas until after the election. Indeed, some bearish Lynas investors and others negative on LAMP, have suggested that if the BN supported the project it would have released the License already. Such suggestions are disingenuous; the PR has thrown Lynas into the political game and the ruling BN has decided to play it safely in an effort to gain votes even from those who may have been persuaded by the SMLS claims.

If the current government wins the election, and the BN continues to maintain a lead in most regions of Malaysia, investors can expect Lynas to be granted a License shortly thereafter. By targeting Lynas, the opposition has shown that it is lacking in ideas and therefore resorting to creating a classic scapegoat to attract votes. A recent poll, in preparation for the elections, suggested that more than democracy, over two thirds of Malaysians prefer stability and economic growth. The decision to politicize LAMP, therefore, could yet backfire on the PR; the LAMP project has the potential to make a significant contribution to Malaysia’s GDP when it reaches the operational stage while candidate Ibrahim and the SMSL are trying to block it, gambling its potential economic benefits. Malaysia has enjoyed a reputation as one of the best places to invest in Asia and the scaremongering by SMLS will hurt Malaysia’s role as one of the most dynamic economies in South East Asia by grossly exaggerating its environmental impact. Investors, looking for alternatives to China, will then perceive Malaysia as a poor place to do business. Anwar Ibrahim understands this and it is likely that rather than taking the the risk of ruining investment opportunities, Ibrahim, himself will agree to a compromise settlement with Lynas – unless of course the PR truly has some kind of economic death wish by discouraging much needed foreign investment.

The very highly respected former prime minister Mahathir Mohamed has urged Malaysians to vote for the BN in the forthcoming elections, noting that the best that the opposition has been able to do is generate hate against the government coalition instead of proposing ideas. The BN, moreover, has on its side the support of critical statistics such as economic growth, which was reported to have reached 5.4% in the midst of a continued global recession. Lynas itself has taken the game to the NGO’s, launching new projects within LAMP aimed at boosting productivity and what the company calls “cooperative economic development” through the production of more value added downstream products and more research and development activity, engaging local high-tech businesses to participate in order to boost value for Malaysians themselves. Adding to the optimism is that Pahang, the area where LAMP is based, is attracting ever more foreign investors, regardless of the negative publicity generated by some NGO’s and the PR. Investment generates jobs for locals and it will be tough for Lynas detractors to challenge this. It is worth asking, "if LAMP is hazardous, why are so many companies investing in Pahang?”. Reports of greater investment add t those noting that people have not sold their homes en masse, in response to the fears generated about the Lynas facility. The defection of two MP’s from the ruling Barisan National coalition to the PK have raised speculation of further defections to the opposition should not be seen as a sign of an impending collapse of the BN. This tactic was used in the previous election in 2008 and evidently failed.