Shares in Lynas sharply rose on Monday morning after investors thought an announcement was good news for the rare earths supplier.
Instead, the announcement from Malaysia provided temporary respite in giving it more time to store waste materials at its Malaysian processing factory.
Malaysian government officials are reviewing Lynas’ rare earths processing facilities (and waste management).
The company’s shares initially jumped as much as 8.5% before investors realised what the announcement really said and the shares eased back to be up 0.6% at $1.78 by early afternoon. However, a late rally boosted them back to $1.87 for a gain of more than 5% on the day.
The company, which is one of the world’s major suppliers of rare earths outside China, is being forced to search for alternative locations for its $A1 billion processing plant in Kuantan after the new Malaysian government said last month it was reassessing the company’s operations.
In Monday’s announcement, Lynas said it had been granted an extension of its temporary permission to continue to store a key type of waste materials from its processing operations, while it awaited a decision on a longer-term application.
Some investors reckon that is good news because, in the breathing space, the company can have time to negotiate a settlement.
