Amid fears that China may tighten rare earths supply as part of its ongoing trade war with the U.S., Malaysian Prime Minister Mahathir Mohamad said he plans to allow Lynas Corp. Ltd.'s US$800 million Gebeng rare earths processing plant to keep operating in the country, Reuters reported May 30.
Matthew Ryland of the company's second-largest shareholder, Greencape Capital, said Lynas' strategic value for the country has become very high now, considering it is the only major rare earths producer outside of China.
The statement put an end to months of uncertainty over the future of the plant. Malaysia had held back the process for renewing the company's license in December 2018 over concerns related to radioactive waste disposal.
The company plans to invest A$500 million by 2025 to boost production and invest in its processing facility in Malaysia.
Mahathir added that if the go-ahead is not given, the country will lose a very big investment from Australia, but the radioactive waste needs to be addressed, perhaps by spreading it instead of it being concentrated in one place.
The Gebeng license is due for renewal in September.
Recently, Wesfarmers Ltd.'s bid to acquire Lynas was said to be looking bleak as the rare earths producer's share price grew 15% in May 29 trading on the possibility that China may restrict rare earth exports, The West Australian reported.