Lynas safety plan for rare earths

Q: What recent exploration and deal news should investors know about other Australian rare-earth companies?

Arafura Resources reported substantial discoveries at a Northern Territory deposit; Alkane Resources signed a memorandum of understanding with Mintech for a zirconium joint venture; and Northern Minerals—in which Lynas holds a 7.6% stake—surged as much as 15% after finding significant quantities of heavy rare earths at Browns Range in Western Australia.

LYNAS Corporation will submit safety plans for its Malaysian rare-earths processing plant by next month, as it races to gain government and regulatory approval to operate by the end of the year.

By InvestSMART · 29 Jul 2011

By InvestSMART ·
29 Jul 2011

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LYNAS Corporation will submit safety plans for its Malaysian rare-earths processing plant by next month, as it races to gain government and regulatory approval to operate by the end of the year.

The safety plan, dealing with the long-term storage of radioactive waste produced by the plant, being built in Kuantan, in the state of Pahang, is one of 11 requirements imposed by the International Atomic Energy Agency last month.

The agency's review found no breaches of international safety standards. In addition to the IAEA recommendations, Lynas and Malaysia's atomic energy regulators have agreed to a health study to appease local communities.

The plant has provoked community outrage over fears of possible radioactive contamination. This has led to sustained protests.

Rare earths are coveted for the role they play in a range of technologies, including hybrid cars, smartphones, iPads and flatscreen TVs. China has 97 per cent of global production but has been restricting exports, prompting a worldwide race by miners to overcome complex hurdles to enter production and meet surging demand.

Arafura Resources said yesterday it had made "substantial" discoveries at a Northern Territory deposit.

Alkane Resources this week signed a memorandum of understanding with Mintech for a zirconium joint venture. Fledgling rare-earths miner Northern Minerals, in which Lynas has a 7.6 per cent stake, surged as much 15 per cent yesterday on news it had found "significant" quantities of heavy rare earths at Browns Range in Western Australia.

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Frequently Asked Questions about this Article…

What is Lynas’s safety plan for its Malaysian rare-earths processing plant?

Lynas will submit a safety plan by next month for its Kuantan, Pahang rare-earths processing plant. The plan specifically addresses the long-term storage of radioactive waste produced by the facility and is one of 11 requirements outlined by the IAEA.

Why is the Lynas Malaysian plant under community scrutiny and what did the IAEA say?

Local communities have protested over fears of possible radioactive contamination from the plant. The International Atomic Energy Agency reviewed the facility, found no breaches of international safety standards, but issued 11 recommendations (including the long-term waste storage plan) to address concerns.

When does Lynas hope to start operating the Malaysian plant and what approvals are needed?

Lynas is racing to gain government and regulatory approval to operate the Malaysian plant by the end of the year; submitting the safety plan is a key step toward meeting those approvals.

How are rare earths used in everyday technology and why are they important to investors?

Rare earths are essential components in technologies like hybrid cars, smartphones, iPads and flatscreen TVs. Their critical role in high-growth tech and clean-energy applications makes rare-earth supply and production important themes for investors.

How does China’s role in rare-earths affect the global market and miners?

China currently accounts for about 97% of global rare-earth production and has been restricting exports, which has prompted a worldwide race among miners to develop new supply to meet surging demand.

What recent exploration and deal news should investors know about other Australian rare-earth companies?

Arafura Resources reported "substantial" discoveries at a Northern Territory deposit; Alkane Resources signed a memorandum of understanding with Mintech for a zirconium joint venture; and Northern Minerals—in which Lynas holds a 7.6% stake—surged as much as 15% after finding "significant" quantities of heavy rare earths at Browns Range in Western Australia.

How could the Lynas safety plan and community concerns impact investors in rare-earth companies?

Regulatory approvals and community acceptance are critical to bringing processing capacity online; timely submission of the safety plan brings Lynas closer to approval, while ongoing protests or additional requirements could delay operations and affect company timelines—important considerations for investors tracking production and revenue prospects.

What milestones and updates should everyday investors watch next in the Lynas and rare-earth sector?

Investors should watch for Lynas’s safety plan submission, government and regulatory approval decisions, outcomes of the agreed health study, any further IAEA recommendations, and exploration or JV updates from peers like Arafura, Alkane/Mintech and Northern Minerals—plus any changes in China’s export policy that influence global supply.