remedying lynas’ toxic relationships- afr

Just saw this one, I guess it wasn't just a print supplement.

The last paragraph jumped out at me ...

"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""

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Remedying Lynas’ toxic relationships
PUBLISHED: 2 hours 29 MINUTES AGO | UPDATE: 2 hours 29 MINUTES AGO PUBLISHED: 27 Mar 2013 PRINT EDITION: 27 Mar 2013


Sally Rose

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