Shares in the company have already jumped nearly 20% in the opening hours of the market on the back of the news.

A permanent licence may be issued within that two-year period if Lynas complies with the requirements and conditions set by the licensing board.

These include that it submit all details of a permanent waste disposal facility. Lynas has been given a 10-month timeline to have plans and its location details submitted for approval.

The licensing board also reserves the right to appoint an independent consultant to evaluate compliance with the standards and regulations that have been set, with any costs to be borne by Lynas.

Last week Lynas was forced to raise $US225 million via a convertible bond issue to cover a $A40 million cost blowout for the initial phase of its $200 million rare earths plant in Malaysia, with production delayed until at least June.

Lynas will use the plant in Malaysia to further treat concentrates from its Mount Weld rare earths project near Laverton in Western Australia, processing them into separate rare earth products.

The company expects costs for the plant, as well as ongoing operational funding requirements for Mt Weld to average $90-100 million.

It said the increased costs were associated with additional engineering requirements and delays in sourcing equipment, as well as impacts from the recent monsoon season.

Phase 1 of the project is set to produce 11,000 tonnes per annum of rare earth oxide at full capacity, while phase 2 will increase its capacity to 22,000tpa REO.

Resources at Mount Weld were upgraded earlier in January to 23.9 million tonnes grading 7.9% rare earth oxide for a total of 1.9Mt of REO.

Shares in Lynas were up 17.23% or 23c in morning trade to $1.565.