Lynas (ASX:LYC) down heavily on Malaysian review fears
Stock
Lynas Corporation (ASX:LYC) $1.72 as at 24/09/2018
Event
Media reports and a rebuttal from Lynas Corporation (ASX:LYC) has caused a wave of selling today. With the rare earths producer finishing the day over -18% lower. Reports from Malaysia attacking Lynas’ operations, where they process a variety of minerals from their WA mine, as unsafe and environmentally damaging to the area. A formal review has not been announced. Lynas had noted that the new Malaysian Government was known to be more environmentally conscious. Highlighting that licence renewals had been delayed longer than expected.
The plant has been running since 2012 and has attracted a lot of unwanted attention due to its environment footprint. Waste from the facility can be highly radioactive and locals fear that this could contaminate the area, particularly while the company is yet to fully pay a $US50mil environmental bond.
Lynas (ASX:LYC) Chart
Market Matters Take/Outlook
An inquiry would create an issue for Lynas – as has been evidenced in the past hence the move today in the stock. In recent times, Lynas was seen as a net beneficiary to the latest round of US tariffs on China which initially included rare earths. Now they have been hit with the double whammy of rare earths being left off the final list and now the risk of an evaluation into its Malaysian operations.
