Lynas Corp Ltd (ASX: LYC) has rallied over 5% this morning after issuing a positive update on the export of WLP. Malaysia’s Prime Minister made some positive comments regarding the renewal of the companies operating license, allowing them to conduct mining activity in Malaysia.
Lynas will not have to export their WLP residue, a waste product of mining activity, allowing them to boost mining activity and increase profits. Despite this announcement not being formally confirmed by the Malaysian Government, the positive comments from the Prime Minister were enough to cause the company to rally strongly at the open in Australia. This is because the regulatory risk was a major concern for the business, and the recent comments from the Malaysian PM result in investors pricing in lower levels of regulatory risk.
The Malaysian media is split on the issue, with some commentators saying the company should buy an uninhabited island and ship waste there. Lynas will be waiting for another announcement in mid-August, where the Malaysian cabinet is expected to formally confirm the move. While it is hard to tell with a high degree of certainty the chance of approval that the market is pricing in, the stock may still rally on a positive update. Lynas has been a top performer since the start of the year, with shares rising by over 70% as positive business and regulatory markets were well received by investors. The company currently has a market cap of $1.75bn and is in the ASX 200 index.
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