A company that refining the rare earth element

The Lynas Advanced Materials Plant (LAMP) has been built in Kuantan, Malaysia.

Lynas indicates that by early 2013, it will be able to supply 22,000 tons of Rare Earth concentrates per annum.

The LAMP has become the hot issues in recent year

INTRODUCTION TO LYNAS

The reasons those attract Lynas choose Gebeng are shown as below:

Offering a 12-year tax exemption. Nearby port facilities Available talent of workers/ skilled

workforce All the resources required to run the plant at

a lower cost than originally approved in Western Australia.

Why Lynas choose Gebeng, Kuantan?

1) Benefits in the aspects of investment and finance

2) Contribute to Gross Domestic Product (GDP)

3) Provide jobs opportunity4) Attract potential investors5) Existence of supporting business6) Currency flow in Malaysia

The Benefits of Lynas in Malaysia’s Economy:

Although Lynas can bring benefits to our country in term of economy but it also poses some economic risks.

The benefits derived from investment may not outweigh the risk.

Issues/ problem statement:

Risk & Consequences Identified:

Consequences Affect fishing and tourism industry Land prices decline and loss of professional and talented people

Risk 1:

Lynas operation and failure in it waste management system will raises the economic risks

Consequences Lose significant revenue due to the 12 year tax exemption granted to Lynas

Risk 2Government regulation risk (12 years tax

exemption & Temporary Operating License)

Consequences Customer shift to others competitor that

doing same type of business Affect the economy due to fluctuation in the price of rare earths.

Risk 3 Rare Earth market demand and price risks

Consequences Affect of local business operation Lost of Confidence of Investors either

local or foreign and delay in operation

Strong public objection to Lynas getting Temporary Operating License (TOL) &

Shortage of funds and capital of investment

Risk 4 & 5

1)Announce to public about the safety of LAMP

2) Government should review on the 12-year tax exemption given to Lynas and perform a more detail analysis in term of cost benefits.

3) Do more training to afford to treat any ermegency cases happen such as leakage

4)Enhance the safety system and buy the assurance if it really want built the plant completely

Precautionary Measures:

For this case study:5 economic risks and their consequences are identified

4 Precautionary steps to control the significant risks

Conclusion

A famous saying, “the opportunities are often accompanied by the risks”.

http://www.cpiasia.net/english/index.php?option=com_content&view=article&id=2314:nowhere-in-australia-would-lynas-be-permitted-so-why-here&catid=216:others&Itemid=193

http://akademisains.gov.my/download/rareearth/RE_Report_English.pdf

http://www.nytimes.com/2010/10/30/business/global/30rare.html?_r=0

http://www.personal.psu.edu/mjc5169/ext-text.html

http://geology.com/articles/rare-earth-elements/

http://www.australianrareearths.com/current-issues.html

http://sun-bin.blogspot.com/2010/10/rare-earth-elements-what-do-they-look.html

References