Malaysia renewed the operating license for Australian-based Lynas on Thursday, allowing it to continue to process rare earths and to build a permanent disposal facility for low-level radioactive waste in the country.
Lynas, the world’s largest rare-earth producer outside of China, operates a U.S. $800-million processing plant in Kuantan, capital of Malaysia’s Pahang state. The company and the Malaysian government had been entangled in a dispute during the past few months over one of the plant’s processes that produces radioactive residue.
The renewal was a shorter-than-expected six months and conditioned on Lynas moving that part of the process overseas within four years – something the company had already announced it would do – and finding a solution for storing the radioactive waste in the meantime.
“Lynas has to identify a specific site to build a Permanent Disposal Facility and produce written approval from the state government to use the site for the PDF,” said a press release issued by the Atomic Energy Licensing Board (AELB), announcing the six-month extension.
“Or, produce written confirmation from authorities of any country to remove Water Leach Purification residue to that country,” it went on to say.
The permit’s approval could have global repercussions, analysts said. It came amid anxiety over a trade war between the United States and China, which could leverage its dominance of rare earths – minerals such as cerium, lanthanum and neodymium – that are used in electronics and smartphones, jet-fighter engines, Tomahawk cruise missiles and space-based satellites.
Lynas’ license was due to expire on Sept. 2. Renewals of such licenses usually give the company three years to operate, local reports said.
In June, Lynas said it would move a portion of its ore processing plant out of Malaysia by 2025, addressing earlier conditions imposed by Prime Minister Mahathir Mohamad for continuing operations in the country. But the Australian government has said it would not accept Lynas’ radioactive waste.
Lynas employs more than 650 people in Malaysia and Australia. It mines rare-earth minerals out of Mount Weld, a collapsed volcano in Australia, and ships them to be refined to the sprawling industrial complex in Kuantan.
Amanda Lacaze, Lynas’ CEO, told reporters last week that the company expected to announce a Western Australian site for processing within months, the Sydney Morning Herald reported Thursday.
The report said the plant was expected to begin operating early 2023.
Malaysian Prime Minister Mahathir Mohamad told media in Fukoka, Japan in early August that the government could not kick Lynas out of the country just because some people did not accept the studies done by experts.
He said foreign investors were watching the government’s moves about Lynas.
“We invited them to invest. If we then kicked them out, others will then say the country made a promise but, when there was a problem, we kicked them out,” Mahathir was quoted by national news agency Bernama as saying. “We cannot do that. … If we chase out the Lynas foreign investor, others will not come to Malaysia.”
Meanwhile, Malaysian environmental activists expressed dismay over the government’s decision to extend Lynas’ license.
“Allowing Lynas to continue operating and generating more radioactive waste is a serious betrayal of the people’s trust,” said Tan Bun Teet, chairman of the Save Malaysia Stop Lynas.