Lynas Corp. Ltd. shares were up nearly 10% on Oct. 12 as Malaysian media reported that long-time opponent Fuziah Salleh resigned as chair of the committee reviewing the environmental impact of its Gebeng rare earths processing plant in Malaysia, which one analyst said is a sign the government is staying true to its pledge of full transparency and independence, even with activist Wong Tack still on the committee.
Malaysian news outlet Utusan Online reported Oct. 12 that Salleh, deputy minister in the Prime Minister's Department, had resigned from the Lynas review committee, and quoted her as saying, "I do not want Lynas to use me as an issue for them to shift the focus from the real issue."
Lynas shares were up 9.23% at the close of trading Oct. 12 on the news, which CLSA resources analyst Dylan Kelly said is consistent with the feedback from his site visit during the week of Oct. 1, which "indicated her involvement was uncertain due to concerns her bias would compromise the independence of the committee."
"We see this as incrementally positive for the stock as the potential for the review to be biased has now been absolved," Kelly told S&P Global Market Intelligence, adding that ASX-listed Lynas now has the opportunity to "set the record straight."
Salleh's move comes despite striking a more conciliatory tone Oct. 7 when she told reporters that "the committee will not disrupt Lynas' operations here [in Gebeng], but it is to monitor the plant as the priority of the government is to ensure any action or proposal taken by them will not affect investors."
Kelly recently said in a client note that Malaysian Prime Minister Mahathir Mohamad publicly pledged a fair review of the plant after weeks of "shrewd public relations and lobbying efforts."
In an open letter, Lynas CEO Amanda Lacaze had previously asked Malaysia's government to conduct a fair, objective and transparent review of its rare earths refinery operations there after her company's shares sank when local media reported that Minister of Energy, Technology, Science, Climate Change and Environment Yeo Bee Yin had announced that Fuziah and Bentong MP Wong would head the committee that reviewed the company's rare earths processing operations.