Market interest in Lynas Corp. has been steadily rising after it announced it is close to its first production output of rare earth metals from its Mount Weld Rare Earth Project.

Citing figures by Macquarie Group Limited, the FNArena reported the Mount Weld Rare Earth Project is pegged at $2.42 per share. Macquarie said it used a long-term rare earth basket price of $40.58 per kilogramme and factored in Lynas Corp.'s operating costs of $15 per kilogramme, including the Phase 2 expansion.

It would increase to $7.70 per share using the spot basket price of $125.34 per kilogramme and a USD/AUD exchange rate of 1.04, Macquarie added.

The Mount Weld Rare Earth Project is one of Lynas Corp.'s asset base. The other is the LAMP plant located in Malaysia. Under Phase 1, combined output from the two projects is expected to reach 11,000 tonnes of rare earth metals annually. Lynas Corp. expects first production output late 2012. Production is likewise expected to double with the completion of Phase 2 expansions by the end of 2012.

But market sentiment remains in doubt that Lynas Corp. will be able to meet its production output timetable, primarily because of the resistance it is presently facing with Malaysian authorities over the LAMP advanced materials plant.

The Australian company has yet to receive from the Malaysian government an approval to operate the plant, rendering the completion of LAMP behind schedule.

The locals in Kuantan where the LAMP advanced materials plant is based oppose the project due to fears of radiation pollution.

The Malaysian government likewise accused Lynas Corp. of pre-empting government issuance of the permit to operate by repeatedly announcing premature start dates of the LAMP project.

In June, Lynas Corp. announced the $200-million plant would be operational by end 2011.

Malaysia's Atomic Energy Licensing Board will award Lynas Corp. the license to operate once the latter completes addressing all 10 areas of improvement identified in an International Atomic Energy Agency (IAEA) report.

The IAEA recommendations include well-laid out plans for decommissioning and remediation of radioactive waste. Moreover, the Malaysia government said it will not allow Lynas Corp. to import raw material from its Mount Weld mine in Western Australia.

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