Lynas plant in Pahang faced class action threat over delays, says report

The Lynas rare earths processing plant in Kuantan, Pahang. (Bernama pic)

PETALING JAYA: Australian media reported today that the Lynas rare earths plant in Kuantan, Pahang, faced a potential class action by Australian law firm Maurice Blackburn over delays in its establishment eight years ago.

Citing a 2016 email by Maurice Blackburn, the Sydney Morning Herald (SMH) said Lynas had told investors in 2010 that the plant would be completed in the last quarter of 2011.

However, delays were not announced until June 2011.

The email, sighted by SMH and The Age, said Maurice Blackburn had been investigating the possibility that Lynas had breached the Corporations Act by failing to immediately disclose the delays.

However, the potential class action was dropped in April 2016 after the law firm failed to reach an agreement over funding for the suit, the report said.

Lynas recently came under pressure from government leaders who urged the company to comply with the energy, science, technology, environment and climate change ministry’s request to send its water leach purification waste back to Australia before September, when its operating licence expires.

Lynas maintains that it has always complied with the government’s storage regulations and that its residue storage facilities are operated in a proper manner.

Lynas is the only major producer outside China of rare earths, which are crucial for making products such as computers and mobile phones.

The company mines ore in Australia and ships it to its processing plant in Pahang, but the government and some local residents are concerned about the growing amount of low-level radioactive residue being kept in storage.

Earlier this month, Australia rejected a proposal for it to accept waste from the plant in Pahang, with Western Australian mines minister Bill Johnston saying it is illegal under the country’s laws to import waste from overseas.

“Generally speaking the best place for contaminated material is where it comes from, which in this case would be in the mine void, but we are not going to take mine waste back from overseas,” he was quoted as saying by The Australian.

Meanwhile, Reuters reported today that Lynas Corp has signed a memorandum of understanding with Texas-based Blue Line Corp to set up a rare earths separation facility in the US.

According to a joint statement by Lynas and Blue Line, the companies will cooperate over the next year to develop the processing facility in Texas. The venture will be majority-owned by Lynas.

No details were given on the cost of the proposed US facility.