Lynas cries foul over unchanged licence conditions

Lynas, the world’s biggest producer of rare earth outside China, will need to close the cracking and leaching part of its rare earth processing plant 

by JUNE MOH / pic BERNAMA

AUSTRALIAN mining company Lynas Rare Earths Ltd has cried foul after its wholly-owned subsidiary Lynas Malaysia received its operating licence approval notice, which came with unchanged conditions set out by the government in March 2020. 

The conditions include the cessation of key activities that authorities said generate radioactive waste that will prevent Lynas from importing and processing rare earth concentrate after July 1, 2023. 

Lynas Rare Earths CEO/MD Amanda Lacaze said the company would take administrative and legal appeals to ensure that Lynas is treated fairly and equitably. 

“After 10 years of safe operation in Malaysia, we are disappointed that the conditions that were applied to our 2020 operating licence remain. This is our sixth operating licence, and four licences granted before 2020 did not include these conditions. 

“While these conditions do not come into effect until July 1, 2023, they are inconsistent with the conditions upon which Lynas was invited to invest in Malaysia and the recommendations of four independent scientific reviews, each of which has found our Malaysian operations to be low risk and compliant with regulations,” Lacaze said in a statement. 

Lynas, the world’s biggest producer of rare earth outside China, will need to close the cracking and leaching part of its rare earth processing plant. 

Science and Technology Minister Chang Lih Kang reportedly said that Lynas would not be allowed to carry out any activities that will produce radioactive waste in Malaysia after July 2023. 

The government has raised concerns about radiation levels from the process of cracking and leaching. 

“The Unity Government is committed to creating a business-friendly environment and understands the importance of the rare earth industry, however, no party has the right to continuously produce radioactive waste in our homeland,” Chang said. 

Lynas’ operating licence was approved last week, effective from March 3, 2023, for three years, by the Atomic Energy Malaysia Department, formerly known as Atomic Energy Licensing Board. 

The current three-year term of Lynas Malaysia’s operating licence is set to expire next month. 

Under its new permit, according to Reuters, Lynas will be able to continue other parts of processing until March 2026. 

Lynas had applied to Malaysia’s regulator for the conditions to be removed because they “represent a significant variation from the conditions under which…Lynas made the initial decision to invest in Malaysia”. 

The decision puts a greater focus on the construction timeline for Lynas’ cracking and leaching facility in central Australia, broker Canaccord said in a report, with Lynas able to use stockpiles for a time if the plant is not ready by July 1. 

Lynas ships rare earth concentrate to Malaysia from its Mount Weld operations in central Australia where it is building the processing plant in the town of Kalgoorlie to add capacity and mitigate Malaysia’s regulatory risk. 

It was previously reported that under the conditions of its licence renewed under then the Pakatan Harapan government in 2020, Lynas was expected to develop a permanent disposal facility to store its water leach purification residue. 

It must also ensure that a cracking and leaching plant outside Malaysia would be in operation before July 2023. 

After that period, Lynas would no longer be allowed to import raw materials containing naturally occurring radioactive material into Malaysia. 

Campaign Against Lynas’ Rare Earth Refinery

The campaign against the rare earth plant began in March 2011, when some Kuantan residents established a group called “Save Malaysia Stop Lynas” to voice their concerns that the plant could produce harmful radiation, a claim vigorously denied by Lynas.

In June 2012, the anti-Lynas activists suffered a setback to their campaign when the government rejected their appeal against the decision to award the company a temporary operating licence. 

Then Science, Technology and Innovation Minister Datuk Seri Dr Maximus Ongkili ruled that there was “no strong justification nor scientific or technical basis” to set aside the decision to grant Lynas the licence, according to a statement released by the ministry. 

The minister did, however, decide that Lynas must meet two additional conditions, namely to submit plans for a method for immobilising radioactive elements in the waste and an emergency response plan to control the release of dust from the residue into the air. 

Environmentalists said part of the reason why the Lynas plant had provoked such a divisive response was that Malaysia’s experience of rare earth projects shaped by another refinery owned by Mitsubishi Chemical Industries Ltd and Beh Minerals near the town of Bukit Merah. 

Chang says Lynas will not be allowed to carry out any activities that will produce radioactive waste in Malaysia after July 2023 (pic: Bernama)

Locals blamed the plant, which was closed in 1992, for birth defects and several leukaemia cases. 

Malaysia’s last rare earth processing facility in Bukit Merah started operating in 1985 without a long-term waste storage site because a succession of nearby communities had successfully protested the site being located on their land. 

The Bukit Merah facility accumulated radioactive waste instead in a nearby temporary shelter and a field, which became heavily contaminated along with the refinery. The owner, Mitsubishi Chemical Holdings Corp, closed the factory in quietly spent US$100 million (RM443 million) since then on a clean-up programme for the radioactive waste that included removing scraps of the factory along with the contaminated sand beneath it down to bedrock. 

That refinery was processing ore with far more radioactive thorium contamination than the ore that Lynas uses. 

The International Atomic Energy Agency did endorse safety procedures set out by Lynas for operations like the transport of the slightly radioactive ore from a mine in the west Australian desert by way of Singapore to the Malaysian port of Kuantan, followed by a short truck trip to the Gebeng industrial district. 

Rare Earth Reserve: Top 8 Countries

The rare earth market outlook is supported by strong supply and demand fundamentals heading into a new economic era with a focus on clean energy and technological advancements. 

However, with supply chain worries rising in the rare earth elements space, it is worth looking at which countries have the highest reserves. 

While in many cases the world’s major rare earth mining countries hold large amounts of reserves, some countries have low rare earth production and high reserves. 

Case in point, mines in Brazil produced only 80 metric tonnes (MT) of rare earth elements in 2022, but the nation’s reserves are tied for the third highest in the world. It is possible that countries like this could become bigger players in the future. 

The top eight countries with rare earth reserves of more than one million MT, according to data from the US Geological Survey’s 2023 report on rare earth, are China (44 million MT), Vietnam (22 million MT), Brazil and Russia (21 million MT), India (6.9 million MT), Australia (4.2 million MT), the US (2.3 million MT) and Greenland (1.5 million MT). 

The rare earth market outlook is supported by strong supply and demand fundamentals heading into a new economic era with a focus on clean energy and technological advancements

Global Total for Rare Earth Reserves

Global rare earth reserve amounted to 130 million MT. With demand for rare earth minerals ramping up as hype about electric vehicles and other high-tech products continues, it will be interesting to see how the top producers contribute to future supply. 

Rare Earth Metals 

Rare earth is a basket of 17 naturally occurring elements composed of 15 elements in the lanthanide series, plus yttrium and scandium. 

Other than scandium, all rare earth can be divided into “heavy” and “light” categories based on their atomic weight. 

Heavy rare earth is generally more sought after, but light rare earth elements can be important as well. 

The Most Technologically Useful Rare Earth Metals

Rare earth metals play a significant role in the development of various technologies. They are often used in electronics such as laptops and smartphones. 

Rare earth oxides such as neodymium and praseodymium are used in magnets, aircraft engines and green technologies, including wind turbines and electric vehicles. 

Samarium and dysprosium are also used in rare earth magnets while phosphor rare earth such as europium, terbium and yttrium are used in lighting, as are cerium, lanthanum and gadolinium. 


  • This article first appeared in The Malaysian Reserve weekly print edition