Lynas Corp To Shut Down at Malaysia Facility

Lynas Corp is planning to temporarily shutdown production at its rare earths plant in Malaysia after failing to secure regulatory approval to increase annual production levels from local authorities. This latest regulatory hurdle occurs just as a Malaysian parliamentary committee is due to release a high profile report on the Australian-listed miners’ radioactive waste management practices and its impact on the environment. Lynas said on Tuesday the temporary shutdown and associated activities would potentially reduce productions volume of NdPr, a substance widely used in the electronics industry, by about 400 tonnes. It said the calendar year limit on the volume of material that Lynas can process in Malaysia would be reset on January 1, enabling production to resume.  Amanda Lacaze, Lynas chief executive, told shareholders at the company’s annual meeting in Sydney that 400 tonnes of NdPr was worth about A$16m in terms of gross revenues. “As it is now late November, and we have not received that approval, we are prudently planning for a temporary shutdown of production in December,” she said.  Shares in Lynas fell by 2 per cent to A$2 in early morning trading on the ASX.  The Lynas plant in Kuantan is one of the few suppliers of processed rare earths outside of China, serving customers in Japan, Europe and North America. Rare earths, a group of 17 elements, are widely used by the electronics and oil and gas industries.  Dylan Kelly, analyst at CLSA, said the bigger issue for Lynas was the pending release of the Malaysian parliament’s report, which has raised fears that Lynas could face new regulatory hurdles in Malaysia. The parliamentary committee which has drawn up the report is expected to hand it to Malaysia’s minister for the environment later today. Lynas has been the subject of complaints by some local people and environmental activists since it opened its plant in 2012.  Mr Kelly said he expected the report would make few adverse findings against the company, based on a resoundingly favourable public hearing attended by Lynas executives on November 11th.  “In our view we see this event as a positive catalyst for the stock as it clears the ire of political risk and achieves a larger public relations win in espousing their environmental record,” he said.

Please follow and like us:
0

Hits: 45

Leave a Reply

Your email address will not be published. Required fields are marked *