The company said today that the site would be used for water leach purification residue.

“Based on preliminary due diligence conducted by Lynas and its consultants, Lynas expects the site will be suitable as the location of the PDF.”

The company’s plant in Gebeng, near Kuantan, is believed to be the world’s largest rare-earths processing plant outside China. The plant has been one of Malaysia’s most controversial environmental issues because of the low-level radioactive waste that is produced.

In August, the federal government renewed the plant’s operating licence for six months on the condition that it establish a permanent facility to store its low-level radioactive waste. The company was also told to plan for a cracking and leaching facility overseas within four years.

Lynas said it had appointed local firm Gading Senggara Sdn Bhd to manage the entire project for US$98 million (RM400 million). The company said it had deposited US$50 million (RM204 million) in cash and bank guarantees with the Atomic Energy Licensing Board.

The US$98 million is expected to cover the cost of design, construction, operation and institutional control of the facility for a period to be decided by the regulatory authorities.

A government-appointed concessionaire, Gading Senggara also holds the licence for industrial waste disposal for the east coast region of Peninsular Malaysia.