December 11, 2012 Glenda Kwek and Philip Wen
Lynas has insisted the legal status of its controversial rare earths refinery remains intact despite being forced into its fourth trading halt in a month, after the Malaysian government called on the miner to dispose of all its waste generated by the plant.
Executive chairman Nick Curtis said the company called the halt to prevent volatility in the share price and to clear the ‘‘noise’’ that was being generated by being kicked around as a ‘‘political football’’ in Malaysia ahead of the country’s hotly-contested election. Shares are expected to resume trade at the start of tomorrow’s session.
The halt was made this morning after four Malaysian government ministers put out a strongly-worded joint statement late yesterday reiterating its requirement that Lynas remove all radioactive residue its Kuantan processing plant produced, or face having its temporary licence revoked.
“The government will not compromise the health and safety of the people and the environment, in dealing with the issue of Lynas,” the statement said.
It followed reports in Malaysia’s Chinese-language media that Lynas’ local managing director, Mashal Ahmad, had said the waste products from the Kuantan plant could not be exported because of international laws.
But Lynas said today that the reports were inaccurate and that it would convert the residue into a commercially safe building product called synthetic aggregate, which would be exported if not allowed to remain in Malaysia.
‘‘There is no legal impediment, no change in our legal status with respect to the operations, we continue to commission the plant … nothing that has been said in this statement has any impact on the prior legal approvals we’ve had,’’ Mr Curtis told reporters today.
Lynas has shot to prominence as Australia’s answer to China’s monopoly on global production of rare earths – a group of metallic elements of strategic importance due to its vital role in the manufacture of rechargeable batteries, wind turbines and tablets.
Shares in Lynas have plunged more than 60 per cent since February as a result of the extended delays and uncertainty surrounding the project. Lynas shares last traded at 60.5¢.
Shares in Lynas’s closest rival, the US-based Molycorp, surged 20 per cent in New York in reaction to the news – the biggest one-day jump since it listed.
There were signs the company had turned a corner after what the company said were decisive court victories over Malaysian activists last month.
The numerous legal challenges by Malaysian activists, who say they are concerned about the environmental impact of the company’s rare earths processing plant, has resulted in repeated trading halts by Lynas. Lynas says the plant meets all safety requirements and that the protests are politically motivated.
Andrew Harrington of Patersons Securities was dismissive of the reports coming out of Malaysia, saying he thought the market was ‘‘very primed for bad news’’.
“[Lynas] held an open house on Friday to show the community and the local people what the plant is, what it is doing and how everything works. I imagine they were expecting positive news in the media reporting from the site,’’ he said.
But Mr Curtis said some ‘‘politically-leaning’’ Malaysian news outlets had chosen to distort representations made by Mr Ahmad, the local managing director.
‘‘Should we have become a political football within the electoral cycle? Well, that’s up to the people in the electoral cycle, not us, to decide,’’ Mr Curtis said.