1. As the manager of the company, based on the above statement by board members, how would...

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Question:

1. As the manager of the company, based on the above statement by board members, how would you evaluate and advise the board about the situation?

2. Board members raise an issue during a board of directors’ meeting, passing a resolution stating:

“Since the information released has no definite impact on the share price of the company, the information released could be not relevant to the market. Therefore, there is no point in disclosing such information again”.

3. As the manager of the company, based on the above statement by board members, how would you evaluate and advise the board about the situation?

Rare earth are a series of chemical elements found in the Earth’s crust that are vital to many modern technologies, including consumer electronics, computers and networks, communications, clean energy, advanced transportation, health care, environmental mitigation, national defence, and many others. Because of their unique magnetic, luminescent, and electrochemical properties, these elements help make many technologies perform with reduced weight, reduced emissions, and energy consumption; or give them greater efficiency, performance, miniaturization, speed, durability, and thermal stability. Rare earth-enabled products and technologies help fuel global economic growth, maintain high standards of living, and even save lives.

An extract from an article titled “Some Facts on Lynas Malaysia” from The Star Online which was published on Friday, 9 Nov 2018, 9:24 AM MYT

Lynas Malaysia operates a chemical factory that refines rare earth ores from the Lynas mine in Western Australia. Rare Earths deposits are generally found alongside naturally occurring radioactive elements. The radioactive material is not enhanced during the separation and refining process. Lynas Malaysia is NOT a nuclear plant and does NOT produce nuclear waste. Lynas produces 2 forms of gypsum as by-products of its Rare Earth refining activities:

An iron phosphor-gypsum is known as WLP contains very low-level naturally occurring radioactivity. It is safely managed under regulations expertly enforced by the Malaysian government through the Atomic Energy Licensing Board (AELB).

Magnesium-rich gypsum known as NUF which is a nonradioactive material. It is safely managed under regulations expertly enforced by the Malaysian government through the Department of Environment Malaysia (DOE).

An extract from an article titled “Lynas rare-earth plant important to Malaysia” from New Straits Times which was published on September 18, 2018 at 8:41 PM

Australian High Commissioner to Malaysia, Andrew Goledzinowski commented that Lynas Advanced Materials Plant (Lynas) in Gebeng should not be shut down as it has contributed a lot in terms of providing 600 jobs and improving the local economy. According to him, jobs that have been created exclude thousands of others that were indirectly involved with the Gebeng plant. In responding to the recent news report about a review of Lynas' operation set to be carried out by a committee under the “Pakatan Harapan” (PH) government, Andrew Goledzinowski said “To date, Lynas is the most reviewed and investigated plant in Malaysia and I do not think that another review will be a problem as long as it is factually supported. It is the rights of the new government to do a review (on Lynas) and Lynas has to take part in it. On my side, I hope the media and public will be able to be given access to what is happening as it will not only assure transparency but also raise awareness about Lynas and its activities.”

Let’s go through some history. According to Lynas Corp’s website, the LAMP was commissioned in late 2012 and has been operating at 75% since 2015. It employs 600 locals in its operations. The company has gone out time and time again to assure the public that its operations are clean, even to the point of inviting people to tour the plant themselves to assess the safety of their operations. IAEA Expert Review on Lynas report that NUF is stored in secured facilities on site with the approval and supervision of the regulating bodies. Lynas Malaysia is able to pursue either of the options for management of the material – reuse or onsite disposal – with sufficient notice. Lynas Malaysia’s preference is reuse in line with international best practice.

The Standard and Industrial Research Institute of Malaysia (SIRIM) tests carried out on NUF (2014 and 2017) confirmed that NUF is not explosive, corrosive, a health hazard, irritant, carcinogenic, eco-toxic or infectious and does not exhibit characteristics of ignitability, reactivity or toxicity.

Since its operation in 2012, LYNAS has faced many issues concerning radiation pollution from the plant, which affect 600,000 people in the state of Kuantan, Malaysia. Regardless of many explanations, publicity and reports produced by AELB and DOE that the plant is safe, however, LYNAS continues to receive complaints from its stakeholders, especially among the community in Gebeng, Kuantan. As a consultant appointed by LYNAS, you are required to report to the board of directors on how to solve the problems faced by LYNAS.

Board members raise an issue during a board of directors’ meeting, passing a resolution stating:

“Since the information released has no definite impact on the share price of the company, the information released could be not relevant to the market. Therefore, there is no point in disclosing such information again”.