Lynas shares rise 19% for rare earth licence in Malaysia

Published:  3 Feb at 4 PM

Shares of Australian mining firm Lynas have risen after it received a licence from Malaysian authorities to run a rare earth refinery in the SE Asian country. Lynas shares ended 19% stronger at A$1.590 at the Australian Securities Exchange.

After being completed, the plant is to be one of the largest supply sources of rare earth elements outside of China. Rare earth materials are used in manufacturing products such as flat screen TVs and hybrid cars.

David Lennox, who is a mining and resources analyst for Fat Prophets called the new developments a big deal, adding that this was the firm’s only processing plant and would take time setting up all the operations. The firm’s plans to open the new plant had caused various protests in Malaysia, as critics warned that the firm would cause environmental destruction to the region. Malaysian authorities have thus granted the go-ahead for an initial two-year period, asking the firm to follow strict safety conditions.

The mining company said it would work towards assuaging any fears over the impact of its activities. Lynas executive chairman Nicholas Curtis said the company recognised its responsibility to the Malaysian community to run the plant safely and sustainably.

Experts said the government approval had been perceived well by markets and investors, although an element of uncertainty was still surrounding the plant. Fat Prophets' Mr Lennox said there were many extra terms and conditions imposed on the company compared to what was understood when it had planned and began construction on the site.