Shares in rare earths group, Lynas are expected to plunge this morning on the ASX after the Malaysian government revealed on Friday that companies interested in acquiring Lynas have agreed to extract radioactive waste before importing it to the Lynas processing plant in Malaysia.
Malaysian Prime Minister Mahathir Mohamad reportedly revealed in a media briefing after a cabinet meeting that companies were interested in acquiring Lynas.
In a statement yesterday Wesfarmers confirmed it has been in discussions with the Malaysian government about Lynas Corp after launching a so far spurned $1.5 billion takeover offer in late March.
But Wesfarmers did not take any responsibility for the announcement on Friday evening by Prime Minister Mahathir of the new conditions which could raise questions about the future of the rare earths group.
Lynas shares closed at $2.11 on Friday, up 1% for the week. Wesfarmers conditional $2.25 a share offer in late March was quickly rejected by Lynas.
Reuters reported on the weekend that the Malaysian Prime Minister apparently told the media conference that the new measures about extracting the radioactive elements in the rare earths ore before it was sent to Malaysia would be required if Lynas wants its licence renewed in September.
Dr. Mahathir did not mention the names of the companies interested in acquiring Lynas. he reportedly told the briefing “We have opened up the business to other people, and there are other companies willing to acquire Lynas.”
“They have given us a promise that in the future before sending the raw materials to Malaysia they will clean it up first. They will crack it and decontaminated it in some way with regard to radioactivity.”
He added that this suitor, or Lynas itself, would be able to operate in Malaysia if they promised that raw materials coming to Malaysia are cleaned of this radioactive material.
In a statement on Sunday Wesfarmers said:
“It is consistent with prior public statements by the Government and the views shared with us in meetings with senior Malaysian Government officials since we announced our proposal to acquire Lynas. We look forward to more detail from the Government about Lynas’ operating licence certainty, to assess the conditionality of our proposal.”
Lynas said in a statement at the weekend (after news of the Prime Minster’s briefing) that it “is seeking clarification from the government regarding the Prime Minister’s press conference and will provide an update when further information is available,” Lynas said after the press conference Friday evening.
