MELBOURNE – Malaysian regulators approved an operating licence renewal for Australia’s Lynas Rare Earths’ Malaysian unit, the company said on Tuesday, but the regulators have not lifted conditions that stop it from importing and processing rare earths concentrate after July 1.

Lynas, the world’s biggest producer of rare earths outside China, will need to close the cracking and leaching part of its rare earths processing plant if the conditions are not removed before then, the company said in a filing to the exchange.

“After 10 years of safe operation in Malaysia, we are disappointed that the conditions that were applied to our 2020 operating licence remain,” chief executive Amanda Lacaze said in the statement.

“We will now proceed with administrative and legal appeals to ensure that Lynas is treated fairly and equitably as a foreign direct investor and a significant employer and contributor to the Malaysian economy.”

Lynas produces neodymium and praseodymium (NdPr) used in magnets in high-tech sectors from electric vehicles to military applications.

Two International Atomic Energy Agency reviews found the plant to be low risk and compliant with relevant regulations, Lynas said.

Lynas had applied to Malaysia’s regulator for the conditions to be removed because they “represent a significant variation from the conditions under which... Lynas made the initial decision to invest in Malaysia”, it added.

Shares opened up 2.5 per cent at A$8.50 after falling as much as 8.2 per cent after a news report at the weekend suggested its operating licence would not be approved.