Action against Lynas spooks mine investors
RARE-earths miner Lynas’s stock took a hit yesterday as investors became nervous after opponents to its Malaysian processing plant sought an injunction to stop the facility starting up.
This month the Malaysian government awarded the company a temporary operating licence for the plant, but protesters are seeking an injunction from Malaysia’s Kuantan High Court against the use of the facility.
Shares in the company, which soared earlier this month after the licence was granted, slid 5.03 per cent yesterday to close at 75c.
The company said the Kuantan High Court would hear the case for the injunction, sought by parties associated with the Save Malaysia Stop Lynas group, next Tuesday.
FILE: Two young children wearing headbands take part in an "Occupy Balok-Gebeng" rally against the Australian miner Lynas Corporation in Kuantan, some 260 kilometres east of Kuala Lumpur, on June 24, 2012. (STR/AFP/GettyImages)
Pending the October 4 hearing, the court issued an interim order that suspends any action under the licence.
“That interim order is not anticipated to impact on Lynas’s planned schedule because Lynas has planned for first feed to kiln at the Kuantan plant after October 4,” Lynas said.
“At the hearing, both Lynas and the Malaysian government intend to strongly assert Lynas’s rights to operate in accordance with the approved and issued temporary operating licence.”
The miner said the plant’s opponents unsuccessfully had sought court orders similar to the requested injunction previously, before the Kuala Lumpur High Court and the Malaysian Court of Appeal.
“Lynas believes, and intends to argue, that the basis for the other courts declining to grant such an injunction remains valid,” Lynas said.
Community groups have protested against the plant, fearing a repeat of the health problems associated with a Mitsubishi refinery at Bukit Merah that was closed in 1992.
The company also revealed in its annual accounts this week that it had been forced to renegotiate its debt covenants with Japan’s Sojitz because of the delay to the start-up of its processing plant in Malaysia.
Early this month the Malaysian government signed off on the temporary operating licence for the plant in Gebeng, seven months after it first received the all-clear from the Atomic Energy Licensing Board.
The revised agreement with Sojitz postpones the measurement of some financial covenant tests by nine months.
Executive chairman Nick Curtis previously has said it was possible the company would need extra cash but he ruled out a capital raising, saying the company had “solid access” to banking markets.
Category: ResourceAsia
