Australia's Foreign Investment Review Board (FIRB), has delayed the ruling on the proposed majority investment in the country's rare earths miner Lynas Corporation (Lynas) by Chinese state-owned China Nonferrous Metal Mining Co. Ltd.(CNMC).
FIRB said on Wednesday that it had not taken a decision on the proposed deal, and set a new early October deadline for its decision, extending it for the third time. In July, the regulator asked CNMC to resubmit its application for approval.
China holds the monopoly of over 90 per cent supply of world's rare earths, and the Lynas deal would give it a controlling 51.6 per cent stake in the biggest rare earth mine under development.
Rare earths are 15 metallic elements commonly known as the Lanthanides and they find their application in a variety of modern equipment such as compact fluorescent lights (CFL), hybrid vehicles, catalytic converters, flat display panels, disk drives, mp3 players, etc.
Chinese media reported on Wednesday that the rare earths industry would be revamped to prop up plunging prices, after a Chinese official commented that the production of rare earths could be trimmed down.
CNMC and Lynas inked the $366 million deal comprising equity injection and debt, in May 2009, providing a lifeline for the cash-strapped Australian rare earths miner which was forced to suspend its activities in February, following the global financial crisis. (See: China's CNMC to acquire Australia's Lynas for A$505 million)
Sydney-based Lynas owns the richest deposit of rare earths in the world at Mount Weld, in Western Australia. However, its development, as well as construction of the advanced materials plant in Pahang, Malaysia, for producing the end products was stuck due to funding problems.