09/04/2019 - 13:37

Wesfarmers defends Malaysian govt discussions

09/04/2019 - 13:37

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Wesfarmers said its talks with the Malaysian government about Lynas Corporation had been mischaracterised, as the rare earths miner confirmed it was considering Western Australian sites for materials processing from its Mt Weld mine.

Wesfarmers defends Malaysian govt discussions
Rob Scott says the company is still interested in engaging with the Lynas board. Photo: Gabriel Oliveira.

Wesfarmers said its talks with the Malaysian government about Lynas Corporation had been mischaracterised, as the rare earths miner confirmed it was considering Western Australian sites for materials processing from its Mt Weld mine.

In a statement to the ASX, Wesfarmers said it had engaged in talks with the government to better understand the licensing and regulatory issues facing Lynas, and to present its credentials as a potential buyer of the miner.

"Wesfarmers is disappointed at the mischaracterisation of its discussions with Malaysian government officials and rejects any inference that these were inappropriate or intended to interfere with government process," the company said.

Malaysian Prime Minister Mahathir Mohamad said on Friday that parties interested in acquiring Lynas had committed to decontaminating the rare earth concentrates of radiation before they were brought to Malaysia.

Wesfarmers' involvement has been criticised by some observers as complicating Lynas's negotiations with the Malaysian government over environmental regulations around its $800 million processing plant in the country.

The conglomorate said it advised the Malaysian government that it did not speak for Lynas and that there was no certainty its proposal to acquire the company would eventuate.

Wesfarmers managing director Rob Scott said the company was still interested in engaging with the Lynas board on its $1.5 billion, all-cash acquisition proposal, after Mr Mahathir's statement offered a “positive step” towards the resolution of longstanding regulatory and operating uncertainty for Lynas.

Today, Lynas also made an announcement to the ASX, in which it said it was considering cracking and leach processing in WA, closer to its Mt Weld mine in Laverton, rather than Malaysia.

“These plans will also assist the company to mitigate risk from any regulatory changes in Malaysia,” it said.

“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 3pm AEDT Lynas shares were flat at $2.12, while Wesfarmers were down 0.87 per cent to trade at $34.13 each.

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