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UPDATE 1-Lynas shares surge 10% on report Malaysia renews rare earths' plant license

license@ (Rewrites with details from media report, Lynas statement)

Feb 13 (Reuters) - Malaysia has agreed to renew Australian firm Lynas Corp Ltd's license to operate its rare earths processing plant in the country, Malaysian media reported, sending shares of the company up as much as 10%.

The license renewal has been agreed in principle by the cabinet and would be valid until March 2023, news website MalaysiaKini reported on Wednesday, citing a source familiar with the matter.

Lynas, the only major proven producer of rare earths outside China, said it has not received any renewal notification.

"Lynas has submitted its licence renewal documentation to the Malaysian Atomic Energy Licensing Board and Lynas awaits the regulator's decision," the company said in a statement.

Lynas' shares rose as much as 10% in their best daily performance in two months before paring some gains to trade up 8.5% at 0300 GMT.

In August last year, Malaysia renewed the operating licence for Lynas' processing plant for six months with new conditions including the identification of a site for a permanent facility to store its low-level radioactive waste.

That license is set to expire in March, and the miner has said it is on track to get it renewed next month.

As part of the six-month renewal, the Atomic Energy Licensing Board also asked Lynas to present a plan to move the site's existing cracking and leaching facility to a location outside of Malaysia within four years of a new license being issued.

Malaysia typically issues renewals for a duration of three years but the six-month permit was issued in response to concerns over the waste.

Lynas generates the low-level radioactive waste during the cracking and leaching process and that waste is what has caused most of the nearby residents' ire toward the facility.

(Reporting by Shriya Ramakrishnan in Bengaluru and A. Ananthalakshmi in Kuala Lumpur; Editing by Tom Hogue and Christian Schmollinger)