Lynas (ASX: LYC) said on Thursday Malaysia has approved a new three-year licence that allows the Australian miner to operate the only major rare earths processing plant outside of China.

The licence will allow it to continue processing rare earths at its $800 million plant in Kuantan, but is subject to the company meeting several conditions that it expects to meet.

It will have to build a cracking and leaching facility outside the country before July 2023, after which it will not be allowed to import raw materials containing naturally occurring radioactive material into Malaysia.

The company, which is the only proven rare-earths miner outside China, would also have to develop a permanent disposal facility for waste from rare-earths processing within the first year from the date of approval of the licence.

The disposal of low-level radioactive waste has been a contentious issue, with a number of Malaysians protesting against the plant citing health concerns.

The miner recently said the Malaysian state of Pahang had approved a permanent disposal site for waste treatment, a big step towards fulfilling one of the key conditions.