Lynas Corp. Ltd. (LYSCF)

[DocLee]

No Option But Wait For The Malaysian Election

I'm in Lynas for the long haul, having bought in just before the sh*t hit the fan with protests over LAMP in Malaysia. I am confident that once LAMP gets into production the SP will climb steeply. However, while there is great uncertainty about LAMP, the SP will be severely depressed and it is easy to see why there have been sell-calls which have depressed the SP even further.

Nothing will be done by the Malaysian Government before the upcoming General Election. If if it holds off issuing the Operating Licence until after the election, it may hang onto the votes of some voters who are currently against LAMP and who might feel (incorrectly) that the current government is still open to being persuaded to reject LAMP ("otherwise they would have issued the licence already"). Every vote counts and those few votes may make the difference between success and failure. If the current government hangs onto power the licence will be issued soon after.

The Opposition has opportunistically opposed LAMP because it can see that there are votes to be won. If it wins the election it may continue in its opposition to LAMP and refuse an operating licence. This will have serious consequences for Malaysia - it will be seen as having a problem with inward industrial investment and companies will invest elsewhere, plus, I would think, Lynas will take some form of legal action against the government. The Opposition party cannot simply do a U-turn if it wins the election and so if it doesn't wish to destroy inward investment it will have to find a compromise such as insisting on new conditions which Lynas will almost certainly accept rather than losing all its investment in Malaysia.

Whichever scenario unfolds, it means more delay and we all have to sit and wait until the results of the Malaysian election are known and hope that the current government is returned.