The Lynas Corporation Ltd (ASX: LYC) share price is crashing back to earth this morning after an update from the rare earths producer, with Lynas shares already down 4.46% at the time of writing.
What did Lynas report this morning?
Lynas' bid for Malaysian regulatory approval has been rejected this morning. The group was seeking an increase in the lanthanide concentrate processing limit for calendar year 2019 (CY19).
The group's application won't be reconsidered until additional reports and management plans are completed. The processing limit resets on 1 January each year, with Lynas now targeting CY20 instead.
The regulatory rejection is a setback for the group, which has a complicated history with the Malaysian Government.
Earlier this year, the Lynas share price jumped after its operating licence was extended by the Asian nation. Lynas operates a refinery in Malaysia and is the largest non-Chinese producer in the world.
How has the Lynas share price performed in 2019?
The Lynas share price has been rocketing higher in December following news of a new U.S. Army rare earths plant.
The military is reportedly looking for a facility for weapons development on home soil. Lynas has thrown its hat in the ring via tender offer and could be in a strong position to play a part.
Lynas expects to submit "a compliant tender" for the facility according to a brief statement. That could be a huge contract if successful, and the news saw investors pile into Lynas shares.
The group's shares are up 59.74% in 2019 and 14.41% just since the start of December. The Lynas share price climbed as high as $3.16 after a takeover bid by Wesfarmers Ltd (ASX: WES) in May.
Foolish takeaway
The Lynas share price jumped 2% higher on 22 October after the company announced its intentions to apply for the higher production limit, so today's news out of Malaysia has dealt a blow to the group's positive share price momentum.
So far in morning trade, Lynas shares are down 4.46% to $2.46.
