Lynas gets Malaysian OK. China monopoly near end

Lynas has done it. But all the signs were there that it would.

On Thursday morning, the Sydney-based company announced it had been granted its temporary operating licence in Malaysia for the Lynas advanced materials plant (LAMP).

As reported here on January 24, under the headline “Lynas closes the deal - and signals Malaysian approval next month”, RareMetalBlog wrote that “New York-based investment firm Mount Kellett Capital Management must be sure that Lynas Corp will soon get approval from the Malaysian government for its rare earths advanced materials plant. The firm, run by former Goldman Sachs partners Mark McGoldrick and Jason Maynard, will provide $225 million through convertible bonds that can be exercised for shares at $1.25 each.”

Well, the ex-Goldman Sachs boys are already in the money with the shares hitting $A1.625 when the market opened and 39 million shares going through during the first 80 minutes of trading.

Lynas said it was confirming the Malaysia’s Atomic Energy Licensing Board had announced its approval of the temporary operating licence for LAMP in Gebang, Malaysia. The licence will be valid for two years and, if Lynas complies with all the licence requirements, a permanent operating licence may be granted within those two years.

There are several conditions - and they have to be completed within 10 months and are not a precondition to the plant's start-up. The Malaysians clearly want the plant to start and these conditions will allow the government to sooth the objectors to the processing. The conditions are :

1. Lynas is to submit all details of a permanent disposal facility (PDF).

2. Lynas is to submit a plan and location details for the PDF, regardless of the outcome of research and development into commercialisation, recycling and re-use of solid residue materials .

3. Lynas’ plans and the location of the PDF to be submitted and approved within 10 months from the date of issuance of the temporary operating licence.

 4. Lynas is to pay $US50 million in instalments to the Malaysian Government as a financial guarantee.

 5. The Atomic Energy Licensing Board reserves the right to appoint an independent consultant to evaluate compliance with the standards and regulations that have been set, the cost of which will be borne by Lynas.

But the bottom line here is that Lynas will soon be a non-China producer of rare earth oxides.

Don’t overlook or underestimate the importance of that step.

Momentous for the industry, no less.