Delays threatening RM80b order book, says Lynas
UPDATED @ 09:30:48 PM 19-04-2012
KUANTAN, April 19 – Delays in government approval of its controversial refinery here may have “very serious consequences” for RM80 billion worth of rare earth orders, says Lynas Corp.
“We are sold out 100 per cent for the next 10 years,” Datuk Mashal Ahmad, the firm’s managing director for its Malaysian operations, told a media briefing at the RM2.5 billion plant today.
But he said that delays to the plant which was initially slated to fire out in the third quarter of last year “has very serious consequences financially and to our customer relations.”
The Australian miner said last year the first phase of its plant will produce rare earth worth RM8 billion annually.
Prices for rare earths, highly sought after for high-technology products such as smartphones, wind turbines and bombs, have since dipped slightly as the market reacted to record highs resulting from export quotas imposed since 2009 by China, which controls 97 per cent of production.
“I am not going to say how long we can last, but it has a very adverse impact,” he said of the refusal by Putrajaya to hand over a temporary operating licence (TOL) despite meeting regulatory standards on paper.
Local regulators Atomic Energy Licensing Board (AELB) had said in January it would approve a TOL subject to added conditions including identifying a suitable long-term waste disposal site.
This was despite Lynas insisting it can reprocess its residue, which it says has only very low levels of radiation, into safe commercial products.
Mashal added today that Lynas’ main competitor was “way behind us” when it started building its plant at the Gebeng industrial zone in 2009, less than three kilometres from the nearest residences.
“Now these delays have allowed them to catch up, impacting our customer relations,” he said.
Lynas has faced fierce protests from local residents and opposition politicians who say that the plant will cause radiation pollution despite the Sydney-based firm insisting it has met and exceeded local and international safety standards.
Mashal also said Lynas decided to move to Gebeng from Terengganu because “we cannot wait” on delayed approval for land for the facility despite meeting AELB and Department of Environment (DOE) requirements.
But he refused to say how long Lynas would wait for the TOL having already sunk RM1.5 billion into the first phase of its plant.
“I have full confidence. You invest where the rules and regulations are clear,” he said, adding that he had faith Malaysia would respect the rules and not “shift the goalposts”.