Lynas' licence renewed but Kuantan plant faces part closure

Australia's Lynas Rare Earths has confirmed that the government renewed the operating licence for its processing plant in Gebeng, Kuantan.

However, the authorities did not lift the conditions that stop Lynas from importing and processing rare earths concentrate after July 1 this year.

Last Saturday, Malaysiakini reported that the government is expected to renew the licence but with the same conditions imposed by the Pakatan Harapan administration in 2020.

The conditions include relocating the “cracking and leaching” facility, which produces radioactive Water Leach Purification (WLP) residue, out of Malaysia before July 2023 and constructing a Permanent Disposal Facility (PDF) to store the existing waste from when it began operating in 2012.

In a statement today, Lynas said the Atomic Energy Licensing Board (AELB) agreed to renew its operating licence effective from March 3 this year for a period of three years.

However, it added that the operating licence has been renewed with no change to conditions that were first applied to the licence issued in March 2020 under the Harapan government, which prohibits the import and processing of lanthanide concentrate after July 1, 2023.

‘Not allowed to produce radioactive waste’

In a brief statement on Facebook later, Science, Technology, and Innovation Minister Chang Lih Kang confirmed that Lynas' appeal to drop the four conditions regarding the cracking and leaching activity was rejected.

"In other words, Lynas will not be allowed to produce radioactive waste in Malaysia after July. I will call for a press conference tomorrow to explain the decision," he added.

According to Lynas' statement, it had asked the authorities to remove the conditions as "they represent a significant variation from the conditions under which the previous four operating licences were issued and under which Lynas made the initial decision to invest in Malaysia."

If not removed by July 1, the “cracking and leaching” component of the Lynas Malaysia plant would be forced to cease operations.

Administrative and legal appeals

The statement said other processes at the Lynas Malaysia plant are not covered by the conditions and would continue with new feedstock sourced from Lynas’ Kalgoorlie Rare Processing Facility once operational.

“After 10 years of safe operation in Malaysia, we are disappointed that the conditions that were applied to our 2020 operating licence remain," said Lynas Rare Earths CEO and managing director Amanda Lacaze.

"This is our sixth operating licence and the four licences granted prior to 2020 did not include these conditions.

"While these conditions do not come into effect until July 1, they are inconsistent with the conditions upon which Lynas was invited to invest in Malaysia and the recommendations of four independent scientific reviews, each of which has found our Malaysian operations to be low risk and compliant with regulations.

“We will now proceed with administrative and legal appeals to ensure that Lynas is treated fairly and equitably as a foreign direct investor and a significant employer and contributor to the Malaysian economy," she added.

The Lynas Malaysia plant is the world’s largest single rare earths processing facility and the only scale producer of separated rare earths outside China.

The rare earths products produced by Lynas are strategic resources for the US, Australia, and Japan, used in the manufacturing of smartphones, electric cars, engines for military jets, and others.

China is the biggest supplier of rare earths, with a 60 percent share of global production while other suppliers include the US, Myanmar, Australia, and Madagascar.

When the trade war between US and China escalated, the US and its allies became concerned about rare earths processing industries outside of China, including in Malaysia.

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