Lynas plans to ship the slightly radioactive ore to its $220 million Lynas Advanced Materials Plant in Kuantan, Malaysia, from the company's Mount Weld mine in Western Australia.
The Malaysian Atomic Energy Licensing Board was to make a decision Jan. 30 on Lynas' application for a temporary operating license for its rare earth processing plant.
But the two-week public comment period on the application has been extended to Jan. 24, Bernama news agency reports.
Furthermore, government sources said that Malaysia's upcoming national elections were hampering final approval of the facility because officials are afraid of a negative backlash that would cost crucial votes, Australia's International Business Times reports.
"Prime Minister Najib (Razak) wants to get solid votes in Kuantan, where the Lynas project is located. So this is another reason for the delay," a ranking government official who requested anonymity said.
While no exact date has been set for the elections, insiders say polling could take place in March.
Lynas has said the refinery, the first processing plant to be built outside of China in nearly 30 years, would meet nearly one-third of the world's demand for rare earths, 17 minerals used to manufacture such products as wind turbines, batteries for hybrid and electric cars, flat-screen monitors, missile guidance systems and mobile phones.
The plant is 95 percent completed, Lynas says and it would take six weeks for it to be operational after the temporary license is granted.
The facility is expected to break China's monopoly of rare earths. While China's rare earths reserves represent one-third of the global totals, it supplies more than 90 percent of the world's supply of the minerals.
While its application has undergone three revisions before the public viewing period, Lynas said it has never been rejected by the local Atomic Energy Licensing Board.
Environmental group Stop Lynas! says the Lynas Advanced Materials Plant is 1.2 miles from a residential area, putting 30,000 people in the area at risk from toxic leaks and emissions.
Lynas Malaysia Managing Director Datuk Mashal told the Malaysian Insider newspaper that Siemens and BASF were among the multinational corporations that had signed on to buy rare earths from Lynas, "indirectly confirming that we conform to international environmental standards," he said.
"Because we conform, they can label their products as green products. The fact they want to enter into a contract with us means they have to do a thorough audit to ensure Lynas is a green supplier," Mashal said.