Report: Lynas Corp almost sued in 2016 over delays in setting up shop
KUALA LUMPUR, May 20 — Reports of rare earth mining company Lynas Corp being the subject of a potential class action suit during its establishment back in 2016 has emerged just a day before the company is set to brief investors on upcoming projections.
A Sydney Morning Herald (SMH) report claimed the class action suit was being pursued by the prominent Australian law firm, Maurice Blackburn, over delays during the company’s setting up.
The SMH report, citing a 2016 email, stated how the firm were investigating potential breaches of the Corporations Act by Lynas for “becoming aware of the likelihood of delays but failing immediately to disclose that to the market”.
On the local front, Lynas’ refinery in Gebeng, Pahang is currently facing potential closure with the Pakatan Harapan (PH) government imposing strict conditions on the Australian company, requiring it to dispose its waste and reduce the radioactive levels of raw materials entering the country.
It was reported that Lynas had in 2010 told investors of the projected completion of the plant by December 2011, but conceded there would be delays in June 2011.
Today’s SMH report detailed how Maurice Blackburn’s suit against Lynas was later abandoned in April 2016 after the firm failed to reach an agreement with a litigation funder.
A 2016 email said how the firm failed to reach a consensus with its funder “to provide financial assistance for prosecuting claims against Lynas and indemnification against any adverse costs order in the event an action was unsuccessful”.
“We do not see any prospect of securing the necessary funding and will not be able to institute class action proceedings. Accordingly, we are discontinuing our investigation,” read the email.
Lynas’ CEO Amanda Lacaze, according to the report, is set to update investors on its plans to set up a second plant in Western Australian during a briefing tomorrow, following a backlash and conditions imposed on its local plant here.
Last month, Prime Minister Tun Dr Mahathir Mohamad said Lynas would be allowed to continue operations in Pahang and have its licence renewed only once the waste materials are removed from the country.
The Australian company had previously revealed expansion plans to Western Australia, which would now likely include cracking and leaching operations to remove radioactive elements before the raw materials are shipped to Malaysia.
“Our objective in developing these plans is to add, not replace, our current operations.
“We believe this is still an achievable path,” the company had said in a previous letter to investors.
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