Uncertainties surrounding Australian rare earths miner Lynas Corporation Ltd's future in Malaysia have hampered efforts to plan expansion, its chief executive said.
Amanda Lacaze (photo) said Lynas has been weighing options to grow its business, which would likely mean expanding beyond its current processing facility in Malaysia.
Lynas' next stage of growth will require additional investments beyond merely squeezing more capacity out of its existing asset, she told Reuters yesterday.
She did not indicate any investment amount or new markets under consideration.
Its US$800 million (RM3.3 billion) plant on the east coast of Peninsular Malaysia began operations in 2012 after long delays caused by legal challenges and environmental disputes.
These challenges were in focus this week when local politicians raised concern over the potential impact of Lynas' low level radioactive residues on the surrounding community and environment.
On Tuesday, Malaysia's Energy, Science, Technology and Environment Ministry said the miner must comply with new conditions regarding waste management, ahead of the expiry of two licences next year, including the export of its low level radioactive residue, a ruling that caught the miner by surprise.
Lynas had expected that an environmental audit of its Malaysian plant released this week would go before parliamentary review before any ministry decisions were made, Lacaze said.
"What we got is a proper constituted review committee (that) developed carefully considered and proper recommendations, and they have just been put aside. I think this is a very difficult environment politically," she said.
The announcement by Malaysia's environmental ministry sent Lynas's shares tumbling by more than a quarter to a six-week low on Wednesday, when Lynas responded in a statement that it would now consider its legal options.
"Our expectations were (when) we got the report from the review committee, we would know exactly what we needed to do and we would map that out. Now we don't."
However, Lacaze said the company's growth plan was not dependent on the issues it faces in Malaysia, but time spent dealing with the issues had put those plans on the backburner.
"If we had not been doing that, we might be further down the path and thinking about growth options," she said.
Lynas' plant has been running at full capacity since 2016.
It has invested more than RM35 million for enhancements made over the last year, and the plant is now able to operate beyond its original capacity.
"We are now able to operate our asset at around 140 percent of the original design, and it comes from improving the efficiencies, optimising the design and making sure our recoveries are better," Lacaze said.
The company has been looking into ways to reduce its radioactive waste as well, a move the government audit recommended.
"We have some plans on that but that takes capital investment which is difficult for us to allocate when we have the sort of uncertainty we have had here in Malaysia," Lacaze said.
Unrestrained power in your hands
For almost 20 years, Malaysiakini has stayed true to the cause of providing the Malaysian public with the truth. We believe that with unadulterated information, the people will obtain power to make informed decisions.
Decisions which lead to a healthy, robust nation - ours!
Keep the truth alive. Support your robust, independent media. You have the unrestrained power to do so.
Who says it's not our fault?
We aren’t trained to take responsibility.
Everytime we observe an injustice - and choose to keep mum - the prevalence of injustice becomes our fault.
Astute journalism paves the way for the public to be continuously furnished with the fastidious truth. You are continuously empowered to act and to uphold the integrity of the nation.
The Rakyat owns Malaysiakini
We choose to take a risk on independent media because we believe that only through independent reporting can one be NOT beholden to the interest of businesses or organisations. This allows us to really pursue the truth - aggressively.
Independent for 20 years.
The victorious people
In the light of holding the truth to power, Malaysiakini will continue to uphold its mission of providing credible news to its discerning public. Your support for Malaysiakini is always treasured as a testament of innate nationalism. Your victory is our history.
Quietly. Effectively. Says it all. Malaysiakini.
Speaking truth to power
When we embarked on this journey 20 years ago, we knew we would face intimidation, harassment, raids, arrests and perhaps even jail terms. We got into this venture with our eyes wide open.
The main reason we have survived this long - when many others have folded - is partly because we are prudent in our finances. But while we may be tightfisted in our budgeting, we do not hold back when it comes to speaking truth to power and holding power to account. And certainly, this new administration will not stop us from continuing to do so.