Activists hold placards during a demonstration held in conjunction with the Earth Day against a planned RM700 million ($230 million) rare earth plant to be built near Kuantan, in Putrajaya April 22, 2011. Residents living around the area of the plant to be built by Australian miner Lynas Corp near Kuantan, 250 km (155 miles) east of Kuala Lumpur, have raised questions over the potential environmental hazards arising from radioactive waste. Earth Day marks an annual effort to raise public awareness about the environment and inspire actions to clean it up.      REUTERS/Bazuki Muhammad (MALAYSIA - Tags: CIVIL UNREST POLITICS BUSINESS)

Activists hold placards during a demonstration against Lynas Corp's rare earth plant in Malaysia. Photo: Reuters

OPPONENTS of a rare earth refinery in Malaysia are refusing to back down after authorities last week gave the Australian company behind the project, Lynas Corp, the approval to proceed.

One group, Himpunan Hijau, has vowed to blockade the port in the Malaysian town of Kuantan, near the plant, if Lynas tries to import the raw earth materials from Australia.

''We are prepared to paralyse the whole port until the raw materials leave our port,'' said Wong Tack, the chairman of the group. ''The world will witness one of the biggest civil disobedience events in this nation.''

The Lynas plant has had several regulatory and construction delays as opponents and residents have held protests and taken legal action because of their concerns that the plant could produce harmful radiation. Lynas has denied that there will be any radiation hazards.

The Atomic Energy Licensing Board of Malaysia said on Wednesday that it had decided to issue Lynas a two-year, temporary operating licence because the company met all technical and regulatory requirements.

The board initially approved the licence in January but refrained from issuing it because Lynas had to fulfil additional conditions.

Lynas said that it would address the ''principal cause of the community anxiety'' - what to do with the radioactive by-products from the plant - by turning the material into ''processed co-products'' for use mainly in manufacturing, such as materials for roads and buildings. The materials would be exported, the company said.

Lynas said on Wednesday it expected to begin processing rare earth concentrates at the plant in October. The company's share price climbed more than 40 per cent last Thursday after the news.

A Deutsche Bank analyst, Chris Terry, said the licence was a ''significant event'' for Lynas.

''It's something that the company has waited since February for and, without the operating licence, Lynas wasn't able to import concentrate from Western Australia or begin commissioning of the plant in Malaysia,'' he said. ''Over the last 12 months or so, there's been delays to the plant construction, there's been a delay in the issuance of the licence and a slide in the rare earth price … which have all contributed to the downtrend in Lynas' share price.''

Rare earths, which are used in high-technology products, including smartphones, electric cars and military equipment, are found in nature with radioactive contaminants that must be separated and disposed of during refining.

Lynas says the waste produced in that process will be well within the limits of what is considered safe.

But opponents are not satisfied that the plant, estimated to cost 2.5 billion ringgit ($772 million), will be safe.

''We will not allow an ounce of raw material to reach our shores,'' Mr Wong said, adding that Himpunan Hijau would recruit ''thousands of people'' to block the port.

The New York Times