Lynas announces start of Production at LAMP - ProEdgeWire

“The LAMP is lit. I want to congratulate Lynas on achieving its first rare earth production, today, February 27, 2013, at its LAMP facility in Malaysia.” Thus said Jack Lifton, noted expert on the rare earths industry, about the start of production at Lynas’s LAMP facility in Kuantan, Malaysia. Mr. Lifton will be addressing an international seminar on rare earths in Kuantan.

After legal disputes, instigated by environmental activists and fueled by political opportunism, Lynas has officially produced the first rare earth products at its LAMP processing plant in Malaysia. As promised at the end of last year, Lynas is on schedule to ramp up production by the second quarter of 2013 at a rate of 11,000 tons per year. As we noted in the rare earth weekly review, investors had started to show optimism last week, as shares closed 5.3% higher. Today, Lynas shares rose an additional 4.3% in response to the announcement. Clearly, the start of commercial production at LAMP is an important milestone after confronting environmental activists in court arguing about the impact of the project on the environment and public health and trying to prevent its gradual development.

In 2012, Lynas shares reflected the uncertainty arising from the long season of litigation with the ‘NGO’ known as Save Malaysia Stop Lynas (SMLS), encouraged by community activists and – indirectly – by the opposition party Pakatan Rakayat. The start of production and the preparations for the first official shipment have vindicated those who believed in the validity and viability of the project. It should be stressed that the Courts have repeatedly dismissed SMSL’s indictments as lacking in evidence to back up the activists’ fears and claims of environmental gloom and doom.

Lynas obtained the temporary license to begin operations at LAMP last September but had to overcome legal obstacles brought forth by the environmentalist organization that delayed the start of production. Indeed, Lynas did start importing the rare earth concentrate from Mt. Weld in Australia last November. In order to be approved by the Malaysian government, LAMP had to pass various environmental tests, which also earned the approval of the International Atomic Energy Agency (IAEA). The residents’ concerns of pollution or radiation are based on an old Mitsubishi rare earths refinery, built along entirely different standards and based on health problems suffered by that plant’s former employees in 1992.

The IAEA stated that radiation from Lynas’s thorium leftovers was sufficiently low as not having to secure any special permission for its transport. In other words there is more risk, if at all, to the actual miners of the rare earth mineral at Mount Weld, Australia; they are the ones who should be most worried about thorium radiation. Nobody is doing any rare earth mining in Kuantan. The SMSL campaign has been accused of lacking scientific expertise and of being far more political than environmental in scope.

Lynas has started official production at an auspicious moment; the Xinhua news agency, today, announce that China’s economy will grow by 8% in the first quarter and that the manufacturing rate is still within the ‘growth’ band of the index, which should translate to favorable sentiment for the value of commodities. With the start of production Lynas has surely earned its place as  one of the protagonists of the gradual geographic shift in the production of rare earths.