The tussle for control of rare earths group, Lynas Corp is starting to look a bit soap opera-ish.
There’s a spurned wannabe suitor in the shape of Wesfarmers (which is sulking after being accused of caddish behaviour in a takeover and having its $1.5 billion rejected), a hot-headed and hot ‘aired’ Prime Minister of Malaysia, prone to shooting from the hip, perhaps one or two other interested parties in the wings, and Lynas twisting and turning to avoid the unwanted advances from Wesfarmers, and in doing so revealing more about its future plans than at any time in the past year.
Yesterday Lynas revealed that it is looking at five sites in WA as part of a plan to move some of its controversial Malaysian rare earths processing plant to WA to overcome a looming ban on radioactive waste.
In a statement to the ASX, its second in as many days, Lynas said it “has been developing detailed plans to grow with the market and deliver long term shareholder value. These plans will also assist the company to mitigate risk from any regulatory changes in Malaysia.”
“We see value in operating alternative cracking and leaching processing close to our resource, and therefore the primary locations that we have been considering for growth are in Western Australia.
“Our preference has always been to add to our Malaysian capability, not replace it. Our Malaysian cracking and leaching operations are performing very well as a result of the IP our Malaysian team has developed and owned – IP which others cannot use – and the hard work of all the Lynas team.
“We remain committed to supporting the Malaysian economy and protecting our people’s jobs. However, this same work means we are well placed to deal with any change in Malaysian government policy.
“At this time, no decisions have been made, however the events of the past few weeks mean we are accelerating this work, and we will share this with you when it is ready.
Lynas has been forced to defend itself after Malaysian Prime Minister Mahathir Mohamad’s comments last Friday that the renewal of its operating licence in September was conditional on low-grade radioactive residue being removed from its ore concentrate before being shipped to Malaysia from WA.
Dr Mahathir’s hints saw closer scrutiny of Wesfarmers’ talks with the Malaysian Government by revealing an unnamed Lynas suitor had already agreed to undertake early-stage processing in Australia. The Financial Review’s Chanticleer columnist accused Wesfarmers of engaging in “dirty tricks with Lynas” – an accusation Wesfarmers tried to refute yesterday in yet another statement from it.
Wesfarmers claimed its talks with the Government were “customary in proposed transactions of this nature”.
“In all our discussions with Malaysian authorities we have made it clear that we don’t speak for Lynas, that our proposal to acquire Lynas remains subject to a number of conditions and there is no certainty it would result in a transaction,” it said.
“Lynas’ operating licensing issues are matters for Lynas to resolve with the Malaysian Government. We have listened to the Malaysian Government’s views to better understand the options for satisfactory licence certainty,” Wesfarmers said in its statement
Lynas shares ended up another cent at $2.13 yesterday.