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Malaysia Gives Lynas Extension to Keep Rare Earths Unit Open

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(Bloomberg) -- Malaysian authorities granted a six-month extension to Australia miner Lynas Rare Earths Ltd. to get its rare earth plant in line with environmental requirements.

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The deadline for the plant to be radiation-free has been extended to January 2024, according to Science, Technology and Innovation Minister Chang Lih Kang. He confirmed an earlier report by the Straits Times on the decision.

The Lynas rare earths refinery in Malaysia is the largest outside China, but has been dogged by environmental concerns and community opposition. The ban threatened to constrain supply of materials that are critical in electric vehicles, wind turbines, and high-tech military equipment.

The government issued a fresh three-year license to Lynas’s plant based in the state of Pahang in February, with one of the conditions requiring the need to move “cracking and leaching” of lanthanide concentrate to an area outside of Malaysia by July 1. Malaysian authorities say the business unit generates radioactive waste.

Lynas is building an alternative processing plant in Australia, but it was unlikely to be ready by the Malaysian ban’s original start date in July. That plant, in Kalgoorlie in Western Australia, would provide the more polluting early stage processing, with a more refined product being sent to Malaysia for finishing.

The decision to delay the ban was relayed to Lynas on Friday after an appeal hearing in April, Chang said. His ministry will issue a statement on the issue on Monday, he told Bloomberg News.

Lynas acknowledged the delay in a statement on Monday, but said it would continue to seek options to challenge the ban.

READ: Lynas Eyes More Rare Earths Capacity If Malaysia Plant Shuts

--With assistance from James Fernyhough.

(Updated with statement from Lynas in final paragraph)

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