Activists have launched a court case against Australian mining firm Lynas in Kuantan, on the east coast of Malaysia.
The Australian company has decided to operate a rare earth refining plant there, but residents in the area are worried about the impact of radiation from the waste created by the refining process.
Production has been delayed at the plant, which can potentially meet up to 20 per cent of global demand for the minerals - used to make high-tech gadgets like smartphones.
Local community and activists say the plant, tipped to be the world's biggest rare earth processing facility, will generate radioactive waste.
The company says the raw material and residue have low levels of radiation, and that it will recycle some of the waste into fertiliser.
Al Jazeera's Florence Looi reports from Gebeng.