Malaysia on Thursday renewed the operating licence of a controversial Australian-run rare earths plant for six months despite concerns from green groups about the impact of radioactive waste it produces.
Lynas hopes its plant, which has processed rare earths from Australia since 2012, can reduce Chinese dominance in the market for the materials.
Rare earth minerals are used in everything from missiles to mobile phones, and Lynas is the only major producer of them outside China.
But environmentalists and the political opposition were against the plant due to health fears related to the waste.
The opposition launched a review into the plant following a shock election win last year, but the atomic energy licensing board announced the Kuantan factory's licence had been extended for six months with several conditions.
The factory, on peninsular Malaysia's east coast, had been due to lose its licence on September 2.
Lynas must transfer part of the production process which generates low-level radioactive waste to another country, and the new facility has to start operations within four years, the board said in a statement.
It must also identify a site to build a permanent disposal facility for waste, and get written approval from local authorities, it said.
The licence renewal had appeared assured after Prime Minister Mahathir Mohamad last week said Lynas could not be forced out of Malaysia as it would send a negative message to foreign investors.
"We invite them (to invest) and then we kick them out. Others will say the country made a promise but, when there is a problem, we kick them out... we cannot do that," he was cited as saying by official news agency Bernama.
He also said that 600 workers would lose their jobs if the plant closed.