The company said in a statement that the first feed of rare earth concentrate had been fed into the kiln at the Lynas Advance Material Plant (LAMP) in Kuantan Malaysia.
The event follows controversy and delays due to strong opposition about possible health threats caused by pollution.
A Malaysian court recently dismissed anapplication by the Save Malaysia Stop Lynas group to blockLynas' operating licence, but the legal challenges are ongoing.
Lynas mines rare earths from the highly regarded Mt Weld in Western Australia, which are metallic elements used in products ranging from digital televisions, mp3 players and fluorescent light bulbs.
"This is a significant milestone for Lynas,"said Lynas executive chairman Nicholas Curtis.
"The operation of the LAMP is now a reality, and the LAMPwill provide real datathat will assure people that the LAMPis entirely safe for our local communities and theenvironment."
It is expected to take about two months before first sales of finished product and cash generation.
