Lynas Rare Earths Ltd (ASX: LYC) shares are slumping today after the company provided an update to investors on its Malaysia operations. At the time of writing, the Lynas share price is trading 1.38% lower at $5.70.
Lynas is the world’s second-largest producer of rare earths and the only significant producer outside China. Rare earth materials are key components in the production of renewable energy technologies.
Lynas Malaysian operations
Lynas operates the Lynas Advanced Materials Plant in Pahang, Malaysia. It first built the facility in 2012 to process rare earth material at a lower cost than it could in its home of Western Australia.
Late yesterday, the company provided an update on how the latest coronavirus lockdown regulations in Malaysia are likely to affect its rare earth processing plant there. The Malaysian Government also announced yesterday that the movement control order (MCO) it had implemented last year in response to the pandemic is being extended until early next month. An MCO is a national governmental restriction on public and business behaviour to help curtail the spread of the virus.
The country is currently experiencing a third wave of infections and has placed restrictions on social gatherings as well businesses and the education system.
While Lynas was quick to provide some reassurance to investors regarding its operation in Malaysia, judging by today’s share price movements, it seems some investors are a little concerned.
In a market update yesterday, the company insisted that the plant will continue to operate with “standard procedures”:
The MCO, which is in effect for the period from 12 May 2021 until 7 June 2021, permits all economic sectors to continue to operate during the period of the MCO. Consistent with the MCO and previous updates, the Lynas Malaysia plant continues to operate with Standard Operating Procedures (SOPs) in place.
Lynas Malaysia has already implemented strict health and hygiene protocols that meet and exceed the Ministry of Health’s requirements. Products produced at the Lynas Malaysia plant are essential to the manufacturing supply chains for critical industries including automotive, medical devices, oil refining and machinery & equipment.
Lynas share price snapshot
The Lynas share price has lost around 8% over the past month and also fell by 11% in April. Lynas shares are, however, still up by around by more than 40% year to date and over 200% in the past year.