PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - A Malaysian MP has said that parts of Prime Minister Mahathir Mohamad's remarks in Tokyo about renewing the Malaysian operating licence of Australian rare-earths miner Lynas Corp were not reported by the media, giving a wrong impression of what had transpired.

Ms Fuziah Salleh, the MP for Kuantan in Pahang - where the Lynas plant is located - said Tun Dr Mahathir had commented that a condition for renewing the licence was for Lynas to first ship back to Australia the waste produced at its Malaysian plant.

Ms Fuziah, who has been pushing for Lynas to ship back the "radioactive" tailings to Australia, said in a statement on Friday (May 31): "I watched in detail the interview of Prime Minister Tun Dr Mahathir Mohamad in Japan on the Lynas issue.

"The issue of the Lynas radioactive waste was explained in detail by the Prime Minister, but it was not reported by the media.

"The media only reported a part of the Prime Minister's speech, which touched on the investment and licensing aspect only, without relating it to the radioactive waste."

Lynas shares surged 15 per cent on Friday after Dr Mahathir said the miner will be allowed to keep running its US$800 million (S$1.1 billion) processing plant in Kuantan, removing a big cloud on the plant's future.

Dr Mahathir told reporters in Tokyo on Thursday: "We think we'll have to renew the licence."

Ms Fuziah said environment minister Yeo Bee Yin is going to Australia in mid-June to discuss the matter with Lynas' management.

"The people should give space for the minister to find a way to realise the condition, and the people should continue to pressure Lynas to be responsible for its radioactive waste, without any compromise," Ms Fuziah said, as quoted by Malay Mail.

PM Mahathir, at the Foreign Correspondents Club in Tokyo on Thursday, said that Malaysia had "bad experience" with radioactive waste in the past, and is wary of the hazards of radioactive material if not disposed of properly.

He was referring to Bukit Merah in Perak, which became a landfill for the tin tailings from tin mining back in 1990s, after a plant was closed down, as it was found that the radioactive waste was causing miscarriages and leukemia among the residents around there.

Responding to a journalist's question, the premier said: "Malaysia has had bad experience with radioactivity. Since then, we do not like radioactive material.

"Since Lynas produces radioactive material, we wanted them to ship out the radioactive material back to the country where the raw material comes from, but the country of origin does not want to accept it.

"We are going to talk to them, but if we fail, of course we need to do something with the raw material - maybe spread it somewhere so that there is no concentrated radioactive material in one place, but we will allow Lynas to carry on, because otherwise we are going to lose a very big investment from Australia."

Meanwhile, a senior official with Malaysia's Energy, Science, Technology, Environment and Climate Change (Mestecc) Ministry said the Lynas plant was not responsible for the concentration of heavy metals found in groundwater near their plant in Pahang, in comments that is sure to add the heated debate on whether the government should renew the company's licence in Malaysia.

Mestecc's Deputy Secretary-General (Environment and Climate) K. Nagulendra told reporters on Friday (May 31) that there was a peak reading during the time the review committee was looking into the fate of the plant's future in Malaysia.

"There was a peak (when the review was being conducted) but groundwater comes from many sources. After the review, the government agencies found that the water quality has returned to normal. So it was just one peak," Mr Nagulendra told a news conference, as reported by Malay Mail news site.

Activists and Kuantan MP Fuziah had said Lynas was responsible for the concentration of heavy metals found in groundwater near its plant.

This was a key reason why activists wanted Lynas to ship back its "radioactive" waste from the plant back to Australia.