'We think we will have to renew': Malaysian PM gives signal on Lynas
Malaysian Prime Minister Mahathir Mohamad has declared his country will likely allow Australian rare earths producer Lynas Corp to keep operating a processing plant in the country.
Dr Mahathir's comments are the clearest indication yet on the future of Lynas' $800 million plant after Malaysia halted the process for renewing its licence because of waste disposal concerns.
Lynas is the only significant producer outside China of rare earths, the name for a group of 17 metals used in batteries, computers, televisions and smartphones.
Their importance to global supply chains was underlined this week after China, the world's biggest producer, threatened to use the metals as a bargaining chip in its trade war with the United States.
"We think we'll have to renew the license," Dr Mahathir told reporters at a news conference in Tokyo, adding Malaysia did not want to lose such a large investment.
Lynas shares surged to the highest in more than five years on Thursday after Chinese newspapers, including the official People's Daily, reported that China was ready to use rare earths to strike back in the trade war.
China supplied 80 per cent of the rare earths imported by the United States from 2014 to 2017, when it accounted for 81 per cent of the world's rare earth production, data from the U.S. Geological Survey showed.
Lynas last week unveiled detailed expansion spending plans of A$500 million ($347 million) designed to boost production and placate Malaysian regulators' concerns about the waste disposal at its plant.
The plan hinges on Lynas receiving its Malaysian licence renewal in September and comes after the company in March rebuffed a $1.1 billion takeover offer from Australian conglomerate Wesfarmers Ltd.
Last December, Malaysia's environment minister said that Lynas must remove its waste stockpiles before the licence could be renewed.
Lynas has maintained that it would not be possible for it to remove the waste within such a short timeframe.
In a statement Lynas said: "We welcome the Prime Minister’s comments and we will update the market when there are further developments."
Reuters with staff reporter