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Lynas hit with toxic tax, wins reprieve on radioactive waste

The 0.5 per cent of gross revenue that it devoted to research will instead be paid to the government as a levy until the company establishes cracking and leaching operations offshore that will remove the radioactive elements from its ore before it reaches Malaysia.

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The charge is expected to deliver millions of dollars to the Malaysian government.

UBS has forecast that Lynas will generate more than $1.1 billion in revenue over the next two years alone, which would generate more than $5 million in government charges.

In May, Lynas said it would spend $500 million by 2025 on value added processing in the US and Malaysia as well as setting up a processing plant in Western Australia, near its Mt Weld mine, to extract radioactive waste from its rare earths before it is shipped to Malaysia. But setting up the WA plant is expected to take years.

Chief executive Amanda Lacaze told reporters at the annual Diggers and Dealers Mining Forum in Kalgoorlie last week that Lynas expects to announce a West Australian site for processing within months. The plant is expected to begin operating early 2023, allowing the transition of processing from Malaysia to start.

Lynas's Mount Weld mine in Western Australia, the richest known rare earths deposit in the world.

Lynas’s Mount Weld mine in Western Australia, the richest known rare earths deposit in the world.

The permanent disposal facility had been flagged as a solution by Malaysian Prime Minister Mahathir Mohamad to allow Lynas to keep its local operations without having to export the waste out of the country before September 3 as a condition of the licence.

Earlier this month Lynas told the ASX it was scouting locations for a permanent disposal facility in Malaysia the day after Dr Mahathir suggested the compromise would secure its licence.

Lynas managing director, Datuk Mashal Ahmad, issued a statement to the local media that the company was looking at disused mines as potential sites.

“There are a number of disused mines in the state of Pahang that require rehabilitation and a PDF can be designed such that it assists in the rehabilitation of this land, providing environmental benefits in a sustainable way,” he said.

“We will work with the government of Malaysia, the Pahang state government and all relevant regulatory bodies to successfully implement these plans,” he said.

Malaysian environment minister Yeo Bee Yin, a critic of the Lynas operations, had said the decision made by cabinet to allow Lynas to set up a permanent disposal facility in Malaysia was a better outcome than earlier proposals.

“I have to say this decision made is not the most ideal in my view but I have made my suggestions,” she told reporters. “It’s far better than the status quo.”

Lynas’ share price plunged in December when her ministry imposed a new condition on the extension of the company’s licence to operate in Malaysia beyond September this year. This included the removal of more than 450,000 of low level radioactive waste.

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