Before the Lynas building a plant in Gebeng, Kuantan, Lynas has been approved by building a plant in others country such as Australia and China. Anyway, Lynas finally decided built the plant in GegengKuantan.
. In this case study, we are going to identify the economic risk that might cause by Lynas and its consequences. Precautionary steps to control the significant risks will also be discussed.
report of financial risk on lynas malaysia
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
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.
1) Benefits in the aspects of investment and finance2) Contribute to Gross Domestic Product (GDP)3) Provide jobs opportunity4) Attract potential investors5) Existence of supporting business6) Currency flow in Malaysia
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.
Consequences Affect fishing and tourism industry Land prices decline and loss of professional and talented people
Consequences Lose significant revenue due to the 12 year tax exemption granted to Lynas
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 4 & 5 Consequences Affect of local business operation Lost of Confidence of Investors either local or foreign and delay in operation
1)Announce to public about the safety of LAMP2) 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 leakage4)Enhance the safety system and buy the assurance if it really want built the plant completely