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AFTER months of delay, Malaysia’s Atomic Energy Licensing Board (AELB) has granted Lynas a two-year licence for its controversial rare earths refinery in Gebeng.

Lynas’ hopes for the 700m ringgit (US$230m) plant suffered a setback in June 2011, when the International Atomic Energy Agency (IAEA) advised the Malaysian government to reject the application. It recommended withholding the company’s license until it had developed a long-term waste management plan.

In a statement, the ALEB said that “the temporary operating license (TOL) application is approved, with several conditions. If these conditions are not complied with, the TOL may be suspended or revoked and the company’s next licence application will not be considered.”

In order to keep hold of its licence, Lynas will have to supply the Malaysian government with solid plans for a permanent disposal facility by the end of November 2012, as well as a US$50m guarantee. The ALEB may also appoint an ‘independent consultant’ to ensure the company is complying with the country’s regulations. If Lynas meets all the standards laid out by the ALEB, it hopes be granted a permanent licence when its temporary one expires.

“The AELB’s decision comes after a thorough and extensive review by the Malaysian government regulatory authorities,” says Lynas chairman Nicholas Curtis. “Lynas recognises its responsibility to the community to operate the plant in a safe and sustainable manner.”

The plant has provoked strong resistance from local communities and environmentalists, after another Malaysian rare earth plant in Bukit Merah was linked to leukaemia and birth defects. When, and if, it is fully operational, however, it will have enough capacity to produce a sixth of the world’s supply of rare earth elements, the vast majority of which is currently controlled by China.