The Lynas Advanced Materials Plant (Lamp) is a strategic project that has the potential to attract new foreign investments, said International Trade and Industry Minister Mustapa Mohamed in explaining why the government is allowing it to run operations tax-free for 12 years.

“Tax exemption incentives is one of the mechanisms to attract investment into the country as defined under the Investment Promotion Act 1986.

azlan “In dealing with competition from other countries which are offering various interesting incentives, the government can also consider other incentives than those provided under the Act especially for strategic and high-impact projects as stated under Section 127 of the Income Tax Act 1967,” said Mustapa in a statement.

The minister said this in addressing criticisms that the rare earths refinery’s tax exemptions, insisting that the project involves high-end technology, promotes the energy-saving industry and is environmentally-friendly.

“Lynas (Corporation) had applied for 100 percent tax exemption for 15 years. But on Oct 11, 2007, the cabinet only approved it for 12 years,” said Mustapa, adding that the plant’s operational licence was effective from Jan 22, 2008.

Besides generating RM65.8 million a year for services and RM52.8 million for utilities, the plant has also created other industries such as the sulphuric acid processing factory in Gebeng that brought in RM200 millon in investments.

The Australian mining firm is under tremendous pressure to allay strong public fears that its RM2.5 billion refinery would not pose any danger to the people and the environment.

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