Australian rare earths miner Lynas Corp. has announced that the second legal action filed by the Save Malaysia Stop Lynas group against its processing plant facility in Malaysia had been shelved off by the Kuantan High Court. But for some reason, shares of the rare earths miner continued to tumble on Thursday.

This latest development could allow the Australian rare earths miner to start production by the end of 2012. Nonetheless, the company's shares dropped as much as 6.11 per cent to 61.5 cents, versus a benchmark index fall of 0.82 per cent as of 11 AEST.

"The recent legal proceedings in the Kuantan High Court have not detracted us from the ongoing operational preparation of the LAMP for production," Lynas said in a statement to the Australian Securities Exchange.

Last week, after its first victory against the same environment group, Lynas shares rose to as much as 80 cents per share.

"Lynas is committed to its objective of successfully transitioning to a rare earths producer and trusted supplier, with first feed to kiln expected by calendar year end, followed by a ramp-up period of three to four months until first commercial sale of REO product and subsequent cash generation, the company statement said.

But even with a year-end target schedule for Lynas's production, the company had earlier said the plant's ramp-up could possibly take three to four months, which means earnings could come in not until March or by the second quarter.

The Australian rare earths miner also believed the Malaysian group would not cease to file similar restrictive legal actions, noting the group had gone to the Malaysian Court of Appeal to have the latest ruling overturned.

"It is possible that the applicants may also make further applications on the same basis," Lynas said.

It remained confident that it will win successive decisions.

"The first two court judgments were very clear in its finding in favour of Lynas and that there was no injunction or stay preventing Lynas from carrying out its operations at the LAMP," the company said.