PM: Reprieve for Lynas nothing to do with Japan

Prime Minister Dr Mahathir Mohamad has dismissed speculation that Australia's Lynas Corp was allowed to continue operating its rare earth refinery in Malaysia to further Japanese interests.

"Nothing to do with Japan," he told reporters in Kuala Lumpur today.

The anti-Lynas lobby, including Kuantan MP Fuziah Salleh, has repeatedly alleged that Malaysia was playing a role ensuring the supply of rare earth to Japan in exchange for cheap loans.

Lynas has a loan agreement with Japan Australia Rare Earths BV (Jare), and supplies Japanese customers.

Lynas is the only major producer of rare earth outside of China, as production had ceased in many other countries due to environmental concerns.

Mahathir also maintained that Lynas' refinery in Gebeng is not dangerous, and that shutting it down would be bad for the economy.

"We sent in experts to examine whether it is dangerous or not. The experts reported that it is not dangerous, but the people who are against Lynas still want to get rid of Lynas.

"It is a big investment – RM1.7 billion – and 700 jobs, high quality and high paying jobs. It is necessary (to attract) investors.

"If we treat Lynas like a pariah and ask them to leave the country, we will not get other people to come to this country to invest," he said.

Putrajaya recently extended the operating licence for Lynas' refinery by six months, and instructed the company to set up a permanent disposal facility for its radioactive water leach purification (WLP) waste.

Under the terms of the renewal, Lynas also has to shift the cracking and leaching phase of its operations overseas within four years, and terminate efforts to commercialise the WLP waste. - Mkini