Malaysia extends licence of rare earth miner Lynas by six months

The Australian-listed firm is the only major proven producer of rare earths outside China

The decision to renew its licence comes as markets are concerned that the industry may get embroiled in the trade war between the US and China

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Uniforms and safety helmets at the Lynas Advanced Materials Plant in Pahang. Photo: Reuters

Published: 8:27pm, 15 Aug 2019Updated: 8:27pm, 15 Aug 2019

Malaysia on Thursday renewed the operating licence for a rare earths processing plant owned by miner Lynas Corp for six months with new conditions, an extension shorter than investors and industry analysts had expected.

The Australian-listed firm is the only major proven producer of rare earths outside China, and the decision to renew its licence comes as markets are concerned that the industry may get embroiled in the US-China trade war.

Beijing has in the past tightened supply of the materials, used in goods ranging from military equipment to hi-tech consumer electronics.

“They’ll have six months to show their progress regarding plans for cracking which for Australia’s case is quite advanced,” said Matthew Ryland of Greencape Capital, Lynas’s second largest investor.

However, the requirement for Lynas to have an alternative processing facility ready within four years suggested that a longer licence renewal would be forthcoming if Lynas met the current conditions, he said. He was optimistic Lynas would meet the four-year deadline.