Uncertainties surrounding Australian rare earths miner Lynas Corporation Ltd’s future in Malaysia have hampered efforts to plan expansion, its chief executive said.
Amanda Lacaze said Lynas has been weighing options to grow its business, which would likely mean expanding beyond its current processing facility in Malaysia.
Lynas’ next stage of growth will require additional investments beyond merely squeezing more capacity out of its existing asset, she told Reuters on Thursday.
She did not indicate any investment amount or new markets under consideration.
Its US$800 million plant on the east coast of peninsular Malaysia began operations in 2012 after long delays caused by legal challenges and environmental disputes.
These challenges were in focus this week when local politicians raised concern over the potential impact of Lynas’ low level radioactive residues on the surrounding community and environment.
On Tuesday, Malaysia’s Energy and Environment Ministry said the miner must comply with new conditions regarding waste management, ahead of the expiry of two licences next year, including the export of its low level radioactive residue, a ruling that caught the miner by surprise.
Lynas had expected that an environmental audit of its Malaysian plant released this week would go before parliamentary review before any ministry decisions were made, Lacaze said.
“What we got is a proper constituted review committee (that)developed carefully considered and proper recommendations, and they have just been put aside. I think this is a very difficult environment politically,” she said.
The announcement by Malaysia’s environmental ministry sent Lynas’s shares tumbling by more than a quarter to a six week low on Wednesday, when Lynas responded in a statement that it would now consider its legal options.
“Our expectations were (when) we got the report from the review committee and we would know exactly what we needed to do and we would map that out. Now we don’t.”
However, Lacaze said the company’s growth plan was not dependent on the issues it faces in Malaysia, but time spent dealing with the issues had put those plans on the backburner.
“If we had not been doing that, we might be further down the path and thinking about growth options,” she said.
Lynas’ plant has been running at full capacity since 2016. It has invested more than 35 million ringgit (US$8.4 million) for enhancements made over the last year, and the plant is now able to operate beyond its original capacity.
“We are now able to operate our asset at around 140 per cent of the original design, and it comes from improving the efficiencies, optimising the design and making sure our recoveries are better,” Lacaze said.
The company has been looking into ways to reduce its radioactive waste as well, a move the government audit recommended.
“We have some plans on that but that takes capital investment which is difficult for us to allocate when we have the sort of uncertainty we have had here in Malaysia,” Lacaze said.