The Malaysian government is reviewing an Australian mining company's plan to set up a rare earth plant in the country amid mounting pressure among environmentalists over possible radiation pollution.

Malaysian International Trade and Industry Minister Mustapa Mohamad said at a media briefing on Friday that the government is setting up an independent panel consisting five to seven experts to analyze the health and safety aspects of the rare earth refinery project.

He said the panel would submit their findings in a month a time frame before which the mining company is forbidden to operate in and import raw materials into Malaysia. The mining company, Lynas, was granted a manufacturing license two years ago and began building a refinery plant to produce rare earth oxides and carbonates at an industrial estate in Kuantan, the capital of Malaysia's east coast state of Pahang.

The Lynas processing plant in Kuantan would produce metals worth 5 billion ringgit (1.66 billion U.S. dollars) a year.

The rare earth is used in making devices like mobile phones, flat screen TV and microwave ovens, and weapons such as rockets.

"The government's position on the matter is clear," Mustapa said. "We will never compromise the public interest in the handling of the Lynas issue, and the health and safety of our people and the environment will continue to receive the highest priority in our deliberations in this regard," he added.

Environmentalists and residents living near the plant recently protested against the project for fear over the environmental hazard posed by the plant and the waste it would generate.

Malaysian regulators had earlier assured that the waste generated by the processing plant is manageable and would have minimal radiation within the safety level.

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