July 1, 2011 / 1:28 AM / 8 years ago

UPDATE 1-Lynas: much work needed for Malaysia plant go ahead

* Lynas shares tumble 10 pct after reports of delays

* Company says still on track to commission plant in 2011

* Lynas says has much work to do to meet IAEA concerns (Adds details, share price)

SYDNEY, July 1 (Reuters) - Australian rare earths firm Lynas said it has “considerable” work to do in order to win a pre-operating licence for its $230 million Malaysian plant, but is confident the plant will be commissioned by the end of 2011.

Media reports of a delay to the project still sent Lynas shares down 10 percent, in heavy turnover making it the most active stock on the Australian bourse.

The plant will shore up global supplies of rare earths but is a hot political issue for Malaysian Prime Minister Najib Razak’s government as the opposition plays up public concern over safety and environmental issues stirred by the plant.

Lynas said the International Atomic Energy Agency (IAEA) raised several issues in a report, including a long-term waste management plan for the plant and a fund to cover the end-of-life cost of decommissioning the plant.

“In addition, there will be ongoing work after the grant of the pre-operating licence to comply with the IAEA recommendations and Lynas will undertake that ongoing work,” it said in a statement on Friday.

Malaysia on Thursday asked Lynas to meet 10 recommendations of the IAEA panel.

Lynas said in a second statement the Malaysian government has clarified that no spokesperson for the government said there would be a one- to two-year delay for the plant in Malaysia, contrary to media reports.

Lynas has so far obtained a site and construction licence. It needs to next obtain a pre-operating and operating licence before it can begin operations.

Lynas shares last traded down 9.6 percent to A$1.79, having traded to a low of A$1.78. (Reporting by Balazs Koranyi and Victoria Thieberger; Editing by Ed Davies)

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