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Malaysia Clashes With Lynas on Need to Export Waste

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Dec. 13 (Bloomberg) -- Four Malaysian ministers issued a second joint statement, insisting Lynas Corp. must export residue from its new rare earths refinery under the terms of its temporary operating license.

Prime Minister Najib Razak’s cabinet discussed the issue yesterday after Lynas Chief Executive Officer Nicholas Curtis said on a conference call Dec. 11 that the Australian company isn’t required to export waste from the Lynas Advanced Materials Plant, or LAMP, in Pahang under its temporary permit. It only needs to come up with a permanent disposal plan and the company has agreed to remove the residue by converting it into commercial products for the export market, Curtis said.

The company belatedly began processing last month after a series of court victories against local residents wanting to block the refinery for fear of contamination. It’s the world’s largest rare-earths processing facility and Lynas has repeatedly insisted it’s safe.

The Southeast Asian nation’s trade and industry, science, environment and health ministers said in a Dec. 10 statement that Malaysia’s Atomic Energy Licensing Board is empowered to suspend or revoke Lynas’ permit and order an immediate halt to operations if it doesn’t export all residue, including products made from waste.

“There will be no change in the government’s position to demand Lynas to remove the residue generated by LAMP out of Malaysia, consistent with the conditions stated in the temporary operation license,” the ministers said yesterday. “The government will ensure that all related government agencies will closely monitor the operation of LAMP.”

Lynas Statement

Lynas shares fell 2.5 percent to 58.5 Australian cents at the close of trading in Sydney. The stock has declined 44 percent this year, compared with a 13 percent gain in the benchmark Australian stock index.

“Lynas has put out a statement on Tuesday and has no more comment on this matter,” Alan Jury, an external spokesman for Lynas who works for FTI Consulting, said by phone from Sydney.

The management and removal of residue is an integral part of the temporary license conditions, Malaysia’s Atomic Energy Licensing Board, which issued the permit, said in a Sept. 8 statement. While the requirement for export isn’t clearly stated, it pointed out Lynas’s commitment to remove the waste from the country.

No Condition

“There is no condition to export” under the license terms, said Andrew Harrington, an analyst with Patersons Securities Ltd. in Perth, in a note Dec. 11. Rather, the license has a condition that requires a permanent disposal facility agreed between the company and the government, he said.

Lynas plans to convert waste materials into commercial products that could be sold locally or overseas, Curtis said on the call. The first phase of the plant, capable of processing 11,000 metric tons a year, was completed in September. Rare earths, 17 chemically similar elements, are used in Apple Inc.’s iPod music players, in addition to flat-screen televisions, magnets and hybrid cars. They’re often found close to deposits of radioactive material used to make nuclear fuel.

“The cabinet reaffirmed the joint statement,” the ministers said yesterday, stressing that public health and safety was its highest priority.

To contact the reporter on this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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