A leading anti-Lynas group has urged the government against extending the temporary operating license (TOL) of Lynas' rare earths processing plant in Gebeng, Kuantan which is due to expire on Sept 2 this year.

Save Malaysia Stop Lynas (SMSL) claimed aside from failing to fulfil a number of TOL conditions, the company's ailing financial condition could see a possible risk of Lynas being shut down abruptly and its waste left abandoned in Kuantan.

"Lynas had to resort to rights issue of its shares to its shareholders to pay for the second quarter’s operations.

"In the words of a financial analyst (UBS AG analyst Jo Battershill), 'It’s almost a stay of execution'.

"The government should take cognisance of this fact and refuse to extend or renew Lynas' operating licence," the group said in a statement this evening.

Bloomberg rated Lynas as the worst performer among 11 rare earth producers worldwide this year.

Lynas, which as invested some RM1 billion in the Kuantan plant known as Lynas Advanced Materials Plant (Lamp), has deferred US$215 million in debt amid widening losses due to falling global rare earths prices.

'Who is to pay for cleanup?'

Furthermore, SMSL said Lynas was supposed to put down a US$50 million deposit over five years with the Malaysian government.

However, the company has managed to negotiate this to seven years with the first year only requiring a payment of US$6.05 million, it said.

"The radioactive wastes left behind by Asian Rare Earth (in Bukit Merah, Perak) is still undergoing a cleanup operation costing no less than US$100 million.

"Should there be a foreclosure for Lamp, with the meagre sum of US$6.05 million collected from Lynas, the people of this country will be burdened with the costs of cleaning up the toxic wastes left behind by Lynas," it said.

SMSL added to date, Lynas has yet to reveal to the public the permanent waste disposal site where the factory's wastes will be stored, even though this is one of the conditions for its TOL.

Lynas had at one point claimed it can recycle the waste into usable products; however SMSL said this would require more infrastructure and investment which it claimed is unlikely to happen under the company's current financial situation.

SMSL said in May it sent this appeal not to renew Lynas' TOL to the government but did not receive any reply.

The group reminded the government it is elected to safeguard the rakyat's interests, and warned that it will be held accountable if anything goes wrong.