Lynas Corporation has announced that its rare earth processing plant at Gebeng, Kuantan, has received a three-year extension of the operating licence, until early March 2023.

In an announcement to the Australian Securities Exchange (ASX) today, Lynas said the renewal of its licence come with four conditions, which the Australian miner expects to be able to satisfy.

“We thank the Atomic Energy Licensing Board (AELB) for its decision to renew the operating licence for three years.

"This follows Lynas Malaysia’s satisfaction of the licence renewal conditions that were announced on Aug 16, 2019," said Lynas Corporation CEO and managing director Amanda Lacaze in the ASX announcement.

On Feb 12, Malaysiakini reported that the cabinet has approved the extension of the licence for three years with conditions.

The four conditions, as announced by Lynas today, are:

1. Lynas to begin the process of developing the permanent disposal facility (PDF) within the first year from the date of approval of the licence;

2. Lynas must submit a work development plan for the construction of the PDF and report on its development status as determined by the Malaysian AELB;

3. Lynas must ensure that the cracking and leaching plant outside Malaysia is in operation before July 2023. After that period, Lynas will no longer be allowed to import raw materials containing naturally occurring radioactive material (NORM) into Malaysia; and

4. Holding of the financial deposit will be maintained for compliance with the relevant licence conditions.

In the announcement, Lacaze (above) also reiterated that her company was committed to developing a new cracking facility in Kalgoorlie, Western Australia.

Once the new cracking facility is in place, Lynas will pre-process the materials in Western Australia before sending them to the Malaysian plant so that any radioactive waste generated will remain in its country of origin.

This was also part of the condition set by Putrajaya when it first granted a six-month temporary licence to Lynas in August 2019.

On Jan 30, Lynas said Pahang government consented to a site for their PDF for water leach purification (WLP) residue.

It describes the approved area as being at a remote site in the Bukit Ketam area of Pahang. Bukit Ketam is located near the state's border with Terengganu, more than 30km north of Kuantan. It is about a few kilometres from Felda Bukit Kuantan.

However, Kuantan MP Fuziah Salleh and Bentong MP Wong Tack disagreed with the location of PDF site, saying it could contaminate water supply as Bukit Ketam is adjacent to Bukit Kuantan Hill and Bukit Kuantan is a water catchment area for Sungai Kuantan.

The then prime minister Dr Mahathir Mohamad had said at the time that Malaysia could not force Lynas Corp to leave Malaysia just because some people did not want to accept expert opinions on the safety aspects of the company's operations and also after having invited it to invest in the country.

Meanwhile, according to Reuters, the announcement of the approval has caused Lynas' shares to jump 11 percent.

It quoted analyst Dylan Kelly of Ord Minnett - a private wealth management group - as saying the latest development removes a key risk for Lynas, which has been trading "like a distressed business" and could serve as a catalyst for higher prices.

"The broker has a 'buy' recommendation on the stock for a valuation of A$4.80 (RM13.28). Shares rallied as much as 11 percent on the news before trading at $1.98 by 0043 GMT, up by 4.5 percent," Reuters reported today.