Feb. 1 (Bloomberg) -- Malaysia's Atomic Energy Licensing Board granted Lynas Corp. a temporary operating license to begin refining rare earths under certain conditions following public protests.

The Sydney-based miner will be able to start refining under conditions that include a plan for a permanent disposal facility and paying the government a $50 million security bond in installments, the board said in an e-mailed statement today.

Lynas's plant would be the world's largest refinery of the minerals with total capacity of 22,000 tons per year should a second phase be approved and completed, the company said on Nov. 16. Its plan to start production in September was delayed after the government imposed extra safety standards recommended by an international review panel after residents expressed fears over possible radiation and contamination.

The Australian company, which has rejected the health concerns, has been unable to start exporting ore to Malaysia for refining after opening its A$100 million ($107 million) Mount Weld mine in Western Australia in August.

Lynas's plant is near Kuantan, the capital city of the central Pahang state. Protests by residents and non-governmental organizations over the past 10 months included a march on Malaysia's parliament and the Australian High Commission in Kuala Lumpur.

David Fuller's view This is obviously good news for Lynas (weekly & daily) because some people have wondered if the besieged plant would ever open. The share shows clear evidence of base formation development and is one of many small miners showing recovery potential.

Full disclosure - Lynas is in my personal long-term investment portfolio.