KUALA LUMPUR, Sept. 5 (Kyodo) — Australian mining firm Lynas Corp. has been granted a temporary operating license by the Malaysian government to start running its rare earth refinery after months of delay due to public protests over fears of radioactive contamination.

Both Lynas and the Atomic Energy Licensing Board announced in separate statements on Wednesday that the license would be effective for two years beginning Sept. 3, 2012.

"The TOL will enable Lynas to conduct trial processing of lanthanide concentrates in stages and in limited quantities under close and continuous surveillance by the authorities," AELB said in its statement.

Nicholas Curtis, executive chairman of Lynas, said in a separate statement that receiving the license is a "significant milestone" for the company.

The AELB first approved the temporary operating license in January but later withheld it following public opposition over safety and environment concerns because processing rare earths leaves behind low-level radioactive waste.

Massive rallies were held against the plant located in Malaysia's Pahang state while local residents brought the company to court in a failed attempt to stop the plant's operation.

With a general election around the corner, the issue threatens to become a political threat to the ruling government.

A parliamentary select committee was established to look into safety concerns about the plant. In June, the committee cleared Lynas, declaring that the plant is safe.

In the meantime, the AELB also set several conditions for Lynas to fulfill.

The AELB said Lynas has met all technical aspects including a commitment to take radioactive waste out of Malaysia. Compliance with the prescribed safety standards will be the criteria for conversion of the temporary operating license to a full operating license during the two years.

Lynas has said it is pumping a total of 2.5 billion ringgit (about $800 million) in the project, one of few rare earth processing plants built outside China, which currently controls over 90 percent of the global rare earth production.

It recently expressed frustration at the delay in the issuance of the license, saying it has already received orders for its products.