... and / or the "tax free time" may be shortened or nullified to have a "governmental participation on the prosperity of the company" ... or compensation for taking the risk of keeping the residues/wastes (depending on the definition) in Malaysia. Even more probable, since Lynas showed, that it can pay down it´s debt ahead of scedule and piles material (not longer needs to live from the hand to the mouth).
The tax exemption was also mentioned critically by Yeo Bee Yin in 2012 (for sure, she changed her mind ... as almost all thought, before she nominated FS & WT as a potential review team lead):
"Let's now look at Lynas case like any other investment, that is, to see whether the monetary return justifies the risk. The plant construction is RM 2.5 billion. It is also reported that the plant will bring positive multiplier effects to the Malaysian economy (resulting from employment, company and its employees expenditure, utilities, support services such as transport and logistics, banking, insurance etc as well as the tax revenue), Lynas total direct and indirect contributions to the Malaysian economy over the first 15 years is estimated to be RM 6.04 billion [1, p17].
For simplicity purpose, let's overestimated that all the capital investment is absorbed by Malaysian economy, i.e to hire local contractors and buy materials locally. Also, let's ignore the fact that the above economic contribution estimation took into account the tax revenue (Lynas actually obtained 12 years of tax exemptions, who knows why). Therefore, at the very maximum, Lynas will bring about RM 8.54 billion over the next 15 years to Malaysian economy (RM 2.5 billion + RM 6.04 billion) . If we extrapolate to 20 years of LAMP operation as expected, it will bring be about RM 10.55 billion to Malaysian economy (RM 2.5 billion + RM 6.04 billion x 20/15).
Just to put you into perspective, due to inefficiency, about RM 45 billion of PTPTN loan approved can no longer be traced for collection; due to corruption and other illegal practices, the country suffered RM 1 trillion of lost in illicit money. So are we going to take the risk and 300 years of social liability for RM 10.55 billion to Malaysian economy? "
... in the end - nobody knows! Let the review come, get the arguing points on the table, find a solution - and if revenues are still better than costs after negotiation (and revenues are projected to be improved, if Lynas stays the only one outside China), this will continue to raise ... maybe - and maybe slower than expected. Every startup has it´s backdraws.
A final, personal comment @goofy: You deserve my full respect for taking a more critical perspective on the governmental issue. We might not have always the same opinion, but we have different backgrounds, so why should we get to the same conclusion - or if so, why at the same time? Looking forward for further fruitable discussions.
LYC Price at posting:
$2.38 Sentiment: None Disclosure: Held
(20min delay)