Lynas shares jump as Kuantan plant revs up for start
UPDATED @ 01:47:15 PM 22-11-2012
KUALA LUMPUR, Nov 22 — Shares in Australia’s Lynas Corp soared as much as 12 per cent today after the company said its first shipment of rare-earth concentrates arrived in Malaysia, indicating an imminent start of operations at its controversial processing plant.
The US$800 million (RM2.4 billion) rare-earth plant — the world’s biggest outside China — has been ready to fire up since early May, but Lynas has been embroiled in lengthy environmental and safety disputes with local residents since construction began two years ago.
Activists related to the Save Malaysia Stop Lynas group, which has been leading the campaign against the plant, confirmed the arrival of around 100 containers at the port city of Kuantan on the east coast of peninsular Malaysia. They said the first containers were moved to the nearby Lynas plant in the early hours of Thursday morning, under heavy police guard.
On November 8, the Kuantan High Court lifted a suspension it had placed on the temporary operating licence given to Lynas earlier in the year. An appeal of that decision by activists was rejected.
The shipment’s arrival only two weeks after the decision reflects the urgency Lynas feels to start operations at the plant after months of uncertainty that have hurt its share price.
Lynas had previously indicated that the journey from Australia would take about a month, which suggests the shipment began before the latest court decision was announced.
Lynas, which said operations at the plant were expected to start within days, refused to say when the raw material left Australia.
“The company does not want to share any of its logistics details,” a company spokesman told Reuters.
Lynas shares hit a high of A$0.705 (RM2.24) and were later up around 8 per cent at A$0.68, still well below levels above A$1.50 at the start of the year.
Further legal challenges to block the plant remain. Residents fearing radioactive contamination from the plant have applied for judicial reviews to set aside the Malaysian authorities’ decision to grant Lynas a temporary operating licence. A date for that hearing has yet to be set.
The plant in Kuantan is considered important to breaking China’s grip on the processing of rare earths, which are used in products ranging from smartphones to hybrid cars. — Reuters