Malaysian Rare Earths Refinery on the Cusp (MCP, REE, TM)

Australian mining company Lynas is nearing completion of a rare earth metals refining plant in Malaysia that would be capable of producing about a fifth of the current global demand for the metals. The Chinese currently control the market for rare earths, but Lynas and North American-based companies like Molycorp Inc. (NYSE: MCP) and Rare Earth Resources Inc. (AMEX: REE) are revving up both to produce and refine the minerals.

Lynas’s plant in Malaysia is due to get an operating license this week, but there have been objections to allowing the refinery to begin operations because it will produce about 20,000 metric tons annually of low-level radioactive waste. So far the company has not offered a plan on how to deal with the waste, according to a report in The New York Times.

Worse, though, are collapsing prices for some rare earths. Many industries that have depended on rare earths have been working to find cheaper substitutes. Toyota Motor Co. (NYSE: TM), for example, has developed a new motor for its hybrid vehicles which does not require any rare earth minerals at all.