KUALA LUMPUR – Malaysia on Tuesday set conditions for future renewal for rare earths miner Lynas' licences to operate in the country, including the removal of radioactive residues.

The Energy and Environment Ministry also said in a statement that Lynas must submit an action plan for non-radioactive waste disposal for future licences or permission renewals.

Lynas' $800-million plant located on the east coast of peninsular Malaysia, which produces low-level radioactive waste, began operations in 2012 after long delays caused by legal challenges and environmental disputes.

Its temporary storage licence for radioactive residue in Malaysia is up for renewal in September 2019, while its approval for non-radioactive waste storage is valid until February 2019.

The Ministry said it was concerned about the growing amount of accumulated residue at Lynas' open landfill temporary site that could be hit by major flooding or other natural disasters, citing rising risk to the surrounding communities and environment.

The ministry said it "will not allow the unlimited accumulation of residue" at the plant on worries that Lynas did not have a viable solution in the near term. It did not specify a limit, however.

Lynas is the only major miner outside China of the rare earth elements, metals that are crucial in the production of magnets and other technologies such as mobile phones. It mines raw materials in Western Australia which are sent to the plant in Malaysia for processing.

Lynas said it will release a statement once it has reviewed the Ministry's report.

The decisions came following the completion of a review that Malaysia's government commissioned in September to look into the environmental record of Lynas' processing plant.

The review committee submitted its report to the ministry on November 27.

In the report issued on the Ministry's website on Tuesday, the committee recommended improvements to residue management, periodic health monitoring and studies to identify the source of heavy metals in areas near the plant.

They also suggested setting up a monitoring committee comprising relevant ministries and departments, experts in the field, non-government organisations and local representatives and the Lynas management.

Lynas shares closed down 5.8% at A$2.12 on the Australian Securities Exchange.