Lynas Share Price Up on NUF Update

At time of writing, the share price of Lynas Corporation Limited [ASX:LYC] is up 11.1%, trading at $1.82 per share.

The stock has had a volatile year as it has dealt with a variety of regulatory concerns:

Source: marketindex.com.au

The latest news out of Lynas is that the company has agreed to a ‘pathway’ for the management of NUF with the Malaysian government and regulators.

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Lynas share price reacts to news

Investors warmed to the announcement today which was released last night.

NUF is one of two solid residues produced at Lynas’ plant in Malaysia and is a magnesium-rich gypsum.

NUF stands for neutralisation underflow residue, which is a type of waste regulated by Malaysia’s Department of Environment.

Lynas is allowed to temporarily store the waste at its plant via an approval that is valid until 15 February.

Lynas has approximately 1.1 million tonnes of the waste accumulated.

The company remarked on the NUF arrangement saying, ‘The updated NUF action plan includes commercialization options for NUF and a long term NUF disposal solution. At this stage, Lynas does not expect that this will involve material additional compliance costs.’

What’s next for Lynas?

As mentioned in yesterday’s announcement, ‘[Lynas] remain[s] in ongoing discussions with the Malaysian government to seek to resolve the remaining issues related to WLP, which is the other solid residue produced at the Lynas Malaysia plant.’

WLP stands for water leached purification residue and is the next cab off the queue to have its status resolved.

The company has proposed using WLP residue in a recycled soil enhancement product call Condisoil.

The activist group Save Malaysia Stop Lynas (SMSL) has argued that this recycling program would only account for 13.18% of WLP produced.

So clearly there are some regulatory/political hurdles for the company to overcome before it is in the clear.

Despite a tough year for the stock, Lynas Corporation is betting big on future growth in the rare earth oxide market, with many of these its Rare Earth Oxides (REOs), such as NdPr, being used in future technologies.

These include electric vehicles and clean energy solutions.

Regards,

Lachlann Tierney,
For Money Morning

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