CHINA'S chokehold on the rare earths vital for everything from iPods to missiles is widely expected to end soon, thanks in large part to a contentious new plant in Malaysia.

Australian miner Lynas won a license Wednesday to begin processing rare earths imported from Australia at the plant which is nearly completed despite fierce resistance over environmental and radiation concerns.

Analysts said the Lynas Advanced Materials Plant (LAMP) in eastern Pahang state will be at the vanguard of a world output surge that will break a Chinese stranglehold that has crimped supply and sent prices soaring in recent years.

The plant will be able to process an initial 11,000 tonnes of rare earths per year about a third of current world demand excluding China once output begins in the middle of the year, and eventually 22,000 tonnes annually, Lynas says.

That, plus other new sources and increased output by existing producers, will lead to a 10-fold increase in non-Chinese output to 60,000 tonnes by 2016, said Dudley Kingsnorth, a rare earths expert with Industrial Minerals Company of Australia.

The result being a world surplus as in that year demand outside China should be about 55,000 tonnes, he added.

"A ten-fold increase in five years is a huge increase for rare earths," said Kingsnorth, who added the Lynas facility is the first new plant of its kind outside China in a quarter of a century.

AFP