Australian mining company Lynas Thursday won a court battle allowing it to start production at an $800 million rare earths plant in Malaysia, despite fears by activists of radioactive hazards.

The refinery is set to become one of few sites outside China to process rare earths -- metals used in high-tech equipment ranging from missiles to mobile phones.

Lynas secured a temporary operating licence in early September. But Kuantan High Court in the eastern state of Pahang, where the plant is based, put production on hold after an appeal by the activists.

The court Thursday lifted the suspension, enabling Lynas to start transporting ore from Australia to the plant.

Environmental group Save Malaysia Stop Lynas, which is spearheading the case against the mining company, had called for the suspension to continue.

"This is the darkest day in our lives," group leader Tan Bun Tet told AFP, adding they would appeal against Thursday's ruling.

Campaigners say the processing of rare earths would release radioactive gases and solid waste like thorium, radium, lead and small amounts of uranium into the environment.

Lynas has insisted the plant is safe and said any radioactive waste it produces will only be low-level and not harmful.

But opposition politicians and environmentalists have expressed fears that the waste could seep into the ground and water, harming the environment and people's health.

The project has become a political issue in Prime Minister Najib Razak's home state ahead of elections which must be held by the middle of next year.

Lynas welcomed the court decision, saying there was now no legal obstruction to its operations.

China currently supplies about 95 percent of the world's rare earths. Lynas hopes the Malaysian plant, which will process material from its Mount Weld mine in Western Australia, will help break Chinese dominance of the market.

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