The Australian Financial Review said Lynas was frustrated by its failure to secure approvals to boost lanthanide concentrate processing and by continual politically motivated attacks in Malaysia.
It quoted Lynas managing director Amanda Lacaze as saying the company had no appetite for “additional conflict with the government” when asked during an investor call about the prospect of a compensation claim over approval delays and new operating conditions.
In August, Putrajaya granted Lynas a six-month renewal of its operating licence for its plant in Gebeng, Kuantan, subject to several conditions.
The Australian Financial Review quoted Lacaze as saying Lynas was subject to frustrating “political nonsense” despite doing everything expected of it as a foreign investor and reaching higher standards than those in other industries.
“Suing anybody is always a risky pathway and suing a government is an even riskier pathway, and we won’t be doing that anytime soon, particularly not as we are working to build something that is good for us and good for Malaysia,” she was quoted as saying.
Lacaze said Dr Mahathir Mohamad remained a steadfast supporter of Lynas, the report said, adding that the prime minister wanted the rest of the world to know that Malaysia was open for business.
It said Lynas restricted production in the September quarter to ensure it did not reach its lanthanide concentrate processing cap before the end of the calendar year.
The company is in drawn-out negotiations with the authorities after applying to have the cap lifted.
One of the conditions of the six-month operating licence renewal is that the company must progress plans for a cracking and leaching plant and have approval for a new permanent storage facility in Malaysia for low-level radioactive waste currently stockpiled at Kuantan.
Lynas is understood to favour a site next door to BHP’s nickel smelter outside Kalgoorlie in Western Australia for the cracking and leaching plant after also considering building at its Mt Weld rare earths mine near Laverton.
The new plant will remove radioactivity from rare earths material before it is sent to Kuantan for further processing.
According to the report, Lynas said it saw no problems meeting the approval deadline for a new home for the waste stockpiled at Kuantan, but it remained unclear if any of the US$42 million in a Permanent Disposal Facility bond held by Malaysia’s Atomic Energy Licensing Board can be used to offset the cost.
Lynas, it said, is due to make another payment of about US$8 million to the bond this quarter.