Southern Alliance Mining: Resumption of MCRE Resources’ Rare Earth Operations After Suspension Lifted

Summary of Key Developments

• Uplifting of Suspension: The Malaysian authorities have withdrawn the temporary suspension orders on MCRE Resources Sdn Bhd’s rare earth elements (REE) mining operations in Hulu Perak, Perak, Malaysia.
• Background: The suspension was initially imposed after a water discoloration incident in Sungai Perak, which triggered investigations and subsequent findings of non-compliance in operational and environmental management.
• Non-Compliance Findings: Investigations by the Minerals and Geoscience Department (JMG) and the Department of Environment (DOE) found issues with the Erosion and Sedimentation Control Plan (ESCP), deviations from approved operational workflows, and several administrative/reporting shortcomings.
• Full Remediation: All identified issues have been rectified to the satisfaction of the authorities, paving the way for the resumption of mining activities.
• Post-Withdrawal Requirements: MCRE is required to continue adhering to strict environmental monitoring, reporting, and control measures as mandated by the DOE and JMG.
• Financial Impact: The Board of Southern Alliance Mining expects no material adverse impact on the Group’s financials for the year ending 31 July 2026 as a result of the suspension and its subsequent lifting.

Detailed Insights for Investors

Southern Alliance Mining Ltd. (“the Company”) has announced that the temporary suspension of its associated company, MCRE Resources Sdn Bhd’s rare earth elements (“REE”) mining operations in Hulu Perak, Perak, Malaysia, has been officially withdrawn. The suspension was initially enacted as a precautionary and regulatory response to a water discoloration incident in Sungai Perak, which had attracted significant attention from both the authorities and the media.

Nature and Details of Non-Compliance

• ESCP Deficiencies: The Minerals and Geoscience Department (JMG) found issues related to the Erosion and Sedimentation Control Plan (ESCP), prompting a temporary halt and requiring remedial measures.
• Operational Deviations: The Department of Environment (DOE) uncovered 14 non-compliances with the Environmental Impact Assessment (EIA) approval conditions, including:
  • Unapproved changes to operational workflows and process designs
  • Administrative and reporting failures, such as incomplete Environmental Management Plan (EMP) documentation, scheduled waste management, and the lack of a competent Environmental Officer
• Clarification: MCRE clarified that these non-compliances were technical and procedural, and not directly related to the Sungai Perak water discoloration incident.

Remedial Actions and Regulatory Compliance

In response to the findings, MCRE fully cooperated with the authorities and has since addressed all non-compliance issues. This included implementing corrective actions to align with both the JMG’s and DOE’s requirements. After a series of follow-up enforcement investigations, both agencies confirmed MCRE’s compliance, leading to the withdrawal of the Stop Work Order as of 15 January 2026.

Ongoing and Future Obligations

• MCRE is required to complete closure procedures for the enrichment process as previously submitted to the DOE.
• Continued implementation of a river water quality monitoring programme, in accordance with DOE commitments.
• Updating and submitting EMP documents to the Perak State DOE to reflect updated control and mitigation measures.
• Ongoing compliance with the EIA approval conditions (dated 11 May 2022), the Environmental Quality Act 1974, and all related regulations.

Potential Share Price Implications

This announcement is potentially price-sensitive for investors: The resumption of rare earth mining operations at Hulu Perak by MCRE Resources is a material event, as it restores a previously halted revenue stream for Southern Alliance Mining’s associated company. The market may react positively to the removal of regulatory uncertainties and the company’s demonstrated ability to resolve compliance issues swiftly and effectively.

The company’s Board has explicitly stated that the event is not expected to have any material adverse impact on the Group’s financial position for the year ending 31 July 2026. Investors should note that ongoing regulatory compliance will remain a focus, and any future non-compliance could result in renewed regulatory actions.

Key Takeaways for Shareholders

• MCRE Resources can immediately resume full operations, potentially restoring or increasing revenue contributions to Southern Alliance Mining.
• The company’s ability to comply with regulatory requirements and resolve issues may be viewed positively by the market.
• No material adverse impact is anticipated for the current financial year, supporting confidence in the Group’s financial stability.
• Continued attention to environmental and operational compliance will be critical for maintaining uninterrupted operations going forward.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult their financial advisors before making any investment decisions. The information herein is based on public disclosures provided by Southern Alliance Mining Ltd. and may be subject to change without prior notice.

View SouthernAlliance Historical chart here