An economist has warned the government that its decision to ban Lynas from importing and processing rare earths after July 1 could affect investor confidence.
Investors may see the move as a sign of the government’s willingness to break promises, said Shankaran Nambiar of the Malaysian Economic Research Institute. Stay connected with the latest news by following the FMT Telegram channel
“Lynas says he was invited to invest in Malaysia as the government at the time was well aware of his work style.
“He is arguing now that the government is thinking of violating his original agreement,” Shankaran told FMT. Yesterday, Lynas announced that it has renewed its license to operate in Malaysia for a period of three years without changes to the terms set by the Pakatan Harapan government in 2020.
These include rules that prevent companies from importing and processing small-scale land after July 1. Lynas, which has a manufacturing plant in Gebeng, Pahang, will shut down its fracking and desalination plant that day.
Lynas president Amanda Lacaze said the license granted to the company before 2020 did not include conditions for the importation and processing of rare earths. Shankaran said the government’s decision would be commendable if there was evidence that Lynas’ work was threatening the lives of those around him. “It is important for the government to provide sufficient evidence if Lynas takes his case to court,” he said. Speaking about the Lynas inquiry yesterday, Kubang Kerian MP Tuan Ibrahim Man of Perikatan Nasional urged the government to base its decision on facts and expert opinions.
He said that the stance taken by some political parties on elected officials could harm foreign investors. Geoffrey Williams of the Malaysia University of Science and Technology said the government’s position seems to be in line with PH’s policy on conservation and environmental, social and governance issues.
“There is a difference between a contract and a contract and a contract and a law,” he said. “If there is a change of government, we expect that policies will change.
“I think setting a new process for license renewal is a change in policy and that’s understandable. It will be a different situation if the situation is set while the company’s license is still valid.
He said Malaysia should not feel sorry for losing money on low safety standards or consider it dangerous.