Shares up for Lynas after election
Australian rare earths miner Lynas has continued its positive start to the year, with its shares rising sharply following the re-election of Malaysia's ruling coalition, reducing the likelihood the Australian firm could face further regulatory hurdles at its controversial plant.
Malaysia's opposition party had said it considered reviewing Lynas' permit for the Kuantan plant, after local campaigners' protests that the facility could be an environmental hazard.
Lynas shares closed 16 per cent higher at 58¢ on Monday. Shares in the company have fallen nearly 80 per cent since reaching a peak of $2.60 in April 2011.
J. P. Morgan resources analyst Mark Busuttil said the re-election of the ruling party meant the regulatory headwinds for Lynas had "significantly diminished".
"Now I think the market can focus on the underlying business of the company, which is the commissioning and ramp up of phase one and two of the [Lynas Advanced Materials Plant and] the state of rare earths markets."
Mr Busuttil said Lynas' commissioning appeared to be going to plan, with the company aiming to reach capacity for its first phase by the end of this quarter. "So things seem to be going in the right direction for the company," he said.
A Lynas spokesman said the firm would not comment on the outcome of the Malaysian election.
Lee Tan, the technical adviser of Save Malaysia Stop Lynas, one of the main Malaysian activist groups campaigning against the plant, said the opposition's election defeat would not put a halt to their actions.
"We have yet to work out what chances there are for us to do anything in Malaysia to shut down the plant," Ms Tan said.
"But the 'Stop Lynas' campaign is more international and we'll be campaigning a lot more on the customer side."
Lynas started production at its $900 million rare earths facility in December after extensive delays following legal action from environmentalists.
The company, one of the few non-Chinese rare earths miners, has refuted the environmentalists' claims and fended off their legal challenges so far.
Lynas said last month it was on track to meet its target of producing 11,000 tonnes a year of rare earth oxides by the end of the second quarter of this year.