AUG 9 — Lynas Corporation has just released its quarterly reports ending 30 June 2014. Based on the reports ending 30 June 2014, Lynas is financially in a critical state. SMSL hereby urges the government and the regulatory authority AELB NOT to extend or renew its TOL!
In its Cash Flow report, the quarter ended with a deficit of $A23.775m while its previous quarter had a cash reserve of $A23.359m! It raised $A39.971m from a rights issue exercise and institutional placement of shares last May. It now has a cash balance of $A38.144m, while the next quarter has a forecast outflow of $A58.172m! This does not include the next principal repayment due under the Sojitz Facility of US$35.0m on 30 September 2014!
Though the quarter saw a production of 1,882 tonnes of REO, Lynas only sold 1,630 tonnes and grossed in A$26.495m which is equivalent to a basket price of A$16.254/kg. It is much lower than basket price of US$20.35/kg during the quarter on a China domestic basis. What this means is LAMP is operating on a loss accumulating basis. The market price for REO is continuing to experience a downtrend and this will further exacerbate Lynas’ losses through a full operation ramp up as announced!
It is now clear that Lynas’ financial health is in ‘ICU’! Should it fail to get their creditor Sojitz/LOGMAC to agree to defer their repayments of A$215m in six-monthly intervals till 31 March 2016, it will begin to default on their repayments starting 30 September this year and this could lead to dire and serious implications for the community here! With the meagre sum of US$13.05m received as security deposits, would it be sufficient to dispose of thousands of tonnes of solid radioactive wastes left behind by Lamp safely?
The government of Malaysia and the regulating authority, AELB, should exercise the Principle of Caution and reject Lynas’ application for the Full Operating Stage Licence (renewal of TOL)!
In its activities report ending 30 June 2014, Lynas revealed that it had submitted all documents required for the application for a Full Operating Stage License (FOSL) for Lamp to the AELB. It had also made an e-application as well and submitted a letter of intent to that effect. Lynas claimed that it had complied with all regulatory requirements and ALL conditions of the TOL since it was issued by the AELB in September 2012. (Source: Quarterly report ending 30 June 2014)
The residents of Kuantan and Balok hereby request the AELB to confirm:
· that Lynas has identified a location for its permanent disposal facility (PDF) as required under the terms of the TOL.
· that Lynas has successfully conducted tests on the recycling of solid wastes into synthetic mineral products as claimed in their report and they are prepared to fulfil their undertaking of shipping them abroad to their potential buyers.
· that AELB has certified the road base material developed from water leach purification (WLP) as a non –radioactive material and Lynas is seeking the DOE’s approval for construction of a demonstration and assessement road using this material.
· that the company has gained approval from a customer (is AELB aware of this?) and is preparing to make the first commercial trial export of neutralisation underflow product (NUF).
· that AELB has checked, agreed and approved all these alternatives to finding a PDF.
· that the written undertaking by Lynas to ship all recycled products overseas will be adhered to as directed by the Malaysia cabinet.
The residents are gravely concerned that both Lynas and the regulatory authority have not been fulfilling their pledge to inform and engage the local residents and communities on these matters. It is part of the IAEA recommendations that both Lynas and AELB should adhere to as a precondition to the issuance of TOL.
Lynas claimed that WLP waste will be recycled as road base material and the AELB has certified it as non-radioactive. We would like both Lynas and the AELB to provide us with a sample so that independent experts can have a say over this.
Meanwhile, we urge the DOE NOT to approve the proposal from Lynas for the construction of a demonstration and assessment road using this material! Lynas should have done this before it built its plant here. Why should our land and environment be the experimental laboratory for Lynas’ radioactive waste?
So is the claim by Lynas on the commercialisation of NUF wastes. We demand that all information regarding the customer and the trials that had been carried out be made available to the public so that a fair and independent opinion can be sought from the experts to appease the fears and concern of the people.
Contrary to what Lynas has claimed in their report regarding the fulfillment of ALL conditions under the TOL, it has failed to carry out what it promised in its written undertaking. AELB should under no reasonable circumstances allow the application for the Full Operating Stage Licence (FOSL) to be approved!
We as stakeholders have been bypassed and ignored when Lamp was built. We promise that we will not let this matter rest if proper observation of rules and regulations both by Lynas and the regulating authorities are not adhered to. We shall pursue through whatever means necessary to ensure that our environment is not sacrificed on the altar of foreign profits and the incompetence of our government officials! — Aliran
* This is the personal opinion of the writer or publication and does not necessarily represent the views of Malay Mail Online.