Malaysia plans to extend licence for rare earths producer Lynas

KUALA LUMPUR, Aug 06 (Reuters): Malaysia plans to extend Lynas Corp's license to operate a rare earths processing plant, though it could be for a shorter duration than the usual three years, two sources with direct knowledge of the matter said.

The Australian company has been running the plant in Malaysia since 2012 using rare earths mined from Mount Weld in Western Australia, despite a dispute over the removal of low-level radioactive waste produced by the plant.

A decision to extend the license by a Sept. 2 deadline is important for the market for rare earths, as Lynas is the biggest producer outside China. Beijing has in the past tightened supply of the materials, used in everything from military equipment to high-tech consumer electronics.

Lynas shares were up as much as 7.1per cent to A$2.72 in morning trade on Tuesday, roughly wiping out Monday's losses on the back of a reported hurdle to its Malaysian plant's license extension.

The sources, who declined to be named ahead of a government announcement expected by mid-August, told Reuters that the precise duration of the extension was not yet finalised.

Lynas, which sells most of its products to Japan, declined to comment.

The prime minister's office did not immediately respond to an emailed query seeking confirmation of the license extension.

The company said in June it was stockpiling production of rare earth element Neodymium Praseodymium (NdPr) for strategic customers amid China-U.S. trade tensions that have stoked concerns that Beijing could curb rare earths exports again.