Lynas : Malaysia environment groups, Lynas workers rally over rare earths plant

KUALA LUMPUR (Reuters) - Malaysian environmental groups and Lynas Corp workers held rival demonstrations in Kuala Lumpur on Wednesday over concerns about radioactive waste from the company's rare earths processing plant in the country.

Following the rallies outside the country's parliament, both groups handed statements to government representatives over the plant's licence to operate, which is up for renewal in September.

Some 200 protesters from more than 60 environment and civic groups called on Malaysia to suspend Lynas's operating licence and to ensure it removes "toxic waste" from the country, according to a copy of the letter reviewed by Reuters.

Around 300 Lynas workers from its plant in Kuantan, about 250 km (155 miles) east of Kuala Lumpur, urged that any decisions be based on "scientific fact and evidence," highlighting its importance for employment in the region.

The protest underlines the issues faced by Lynas as it talks with the government over the renewal of its operating licence. It is also trying to fend off a $1.1 billion takeover offer by Australia's Wesfarmers.

Lynas is the only major producer outside China of rare earths, which are crucial for making products such as computers and mobile phones. The International Atomic Energy Agency found in 2015 that risks of radiation to members of the public and the environment from its plant were "intrinsically low."

"Lynas is a significant employer in Kuantan and Indera Mahkota area and 70 percent of Lynas Malaysia's staff are young. They are the future of Malaysia," Lynas executive Mimi Afzan Afza said in a statement.

The company mines ore in Australia for processing at its plant in Malaysia, but the government and some local residents are concerned about the growing amount of low-level radioactive residue being kept in storage.

"A responsible government must suspend Lynas's operating licence, impose heavy fine and order the company to remove its toxic waste and clean up its contamination," the statement from environment and civic groups said.

Malaysia told Lynas in December that it must export stockpiles of a type of residue from its processing plant by Sept. 2, but Lynas has said it could not remove the material in the short timeframe.

Lynas said this week it was considering building a new plant near its mine in Western Australia that would process out radioactivity from the ore before export.

(Reporting by Liz Lee in Kuala Lumpur; additonal reporting by Melanie Burton in Melbourne; editing by Richard Pullin)

By Liz Lee