The NGO Save Malaysia Stop Lynas (SMSL) has urged the government not to consider Lynas’ application for a permanent operating licence, citing the mining company’s financial problems.

 

They claim that Lynas is at a risk of foreclosure, and that would leave behind a ‘toxic legacy’ for future generations.

 

“We are gravely concerned about the possible foreclosure of Lynas. The toxic legacy that will be left behind will burden all future generations for centuries to come.

 

“This is definitely not an unfounded or baseless concern as our research showed the cash flow problem and the future rare earth market ahead for Lynas will be much more challenging than before,” said SMSL spokesperson Tan Bun Teet ( right ) in a statement today.

 

Lynas’ Advanced Materials Plant (Lamp) in Gebeng, Pahang is currently operating on a two-year temporary operating licence (TOL), which Tan says expires on Sept 2 this year.

 

He says according to Lynas’ financial report for the first quarter of this year, Lynas has a closing cash balance of A$23.4 million (RM70.7 million) at the end of the quarter, and it needs A$48.2 million (RM145.5 million) to operate in the second quarter.

 

It had sought to cover the shortfall by selling A$40 million (RM120.8 million) in shares.

 

He also quoted analysts from the financial services company UBS expressing doubt on Lynas’ financial performance.

“If there’s any price weakness, a slowdown in the Chinese economy, or a slowdown in demand for rare earths, then how long does it buy them? It’s hard to know,” the analyst Jo Battershill was quoted as saying by Bloomberg .