Australian company Lynas Corporation says it will comply with recommendations of the International Atomic Energy Agency (IAEA) for approval of the company's rare earth processing plant at Kuantan in Malaysia.

The Lynas Advanced Materials Plant (LAMP) is expected to be operational at full capacity by the second half of 2012 and ready to deliver some products by the first half of that year.

The IAEA report recommends 11 improvements to be implemented before awarding Lynas further licences for the $220 million facility, including a decommissioning plan and dedicated funding for cleanup work at the site.

Lynas’ executive chairman Nicholas Curtis told reporters following release of the report last week, “We will implement all aspects of the recommendations together with the regulatory authorities to further enhance the plant’s safety.”

The company says the LAMP, the first processing plant to be built outside of China in nearly 30 years, will meet nearly a third of the world’s demand for rare earths. Lynas plans to ship the ore from its Mount Weld mine in Western Australia to Malaysia.

In a joint announcement Malaysia’s Minister of International Trade and Industry and the Minister of Science, Technology and Innovation stated: “To move the project forward, Lynas will be required to provide - for AELB’s consideration and approval - a comprehensive long-term detailed plan for waste management, including at the decommissioning and remediation level. This must be done before any further licensing approval can be considered. The government will ensure that Lynas complies fully with this recommendation of the IAEA Report. Until this is done, the status quo remains - there will be no importation of raw materials into the country, and no operational activities will be allowed on site.”

The AELB is the Malaysian regulatory body with authority approve the plan and issue the pre-operational licence. Upon issue of the pre-operational licence, which will allow start up of the plant and ramp-up to name plate capacity, Lynas will still have obligations related to the additional IAEA recommendations and this work will continue during the operational start-up of the LAMP.

The IAEA report also recommended Lynas do more for the Kuantan community, who have fiercely protested the plant. Nicholas Curtis says, “We intend to increase our commitment to community engagements, including a long-term conversation with the residents in Kuantan that will continue for the life of our plant.

“We can confirm there are no engineering issues which we believe will be unsafe. We put the safety of the community and employees ahead of anything else and we will in no way compromise the engineering standards.”