Lynas shares soar on news reports license set to be extended

Lynas has until September 2 to get a new operating license.

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The Lynas Corporation Ltd (ASX: LYC) share price is up 8.3% to $2.75 today on the back of a Reuters news report that the rare earths miner will have its operating license extended by the Malaysian government.

According to Reuters two sources informed it that the license will be extended, but maybe not by as long as the three year period originally expected. The license is due for renewal or cancellation by September 2 under exisiting agreements.  

One of the main sticking points over its renewal has been Lynas's environmental compliance particularly over low-level water leach purification (WLP) radioactive waste. 

Lynas is currently working on plans to build what it calls a 'permanent disposal facility' for the WLP residue, but is still awaiting formal notification regarding new conditions imposed for the renewal of its license.

Lynas is a regular headline maker these days as China has threatened to halt exports of rare earths to the US as part of the escalating confrontation between the two economic superpowers. 

If China did follow this policy rare earth prices could go through the roof, alongside the Lynas share price. 

However, it'd pay to be cautious as the Malaysian and Chinese governments are unpredictable in their policy decisions. 

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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