Conglomerate Wesfarmers insists it is still interested in acquiring Lynas Corp, and says the rare earths miner is still facing regulatory uncertainty around its operating licence in Malaysia.

Shares in Lynas, an Australian-headquartered company which operates a controversial processing plant in Malaysia, surged to their highest level in almost five-and-a-half years on Friday, after Malaysian Prime Minister Mahathir Mohamad said the company was likely to be given approval to keep operating in the country.

Malaysian Prime Minister Mahathir Mohamad has pretty much given Lynas the greenlight to keep operating. Credit:Yam G-Jun

Lynas closed up 11.3 per cent at $3.05, far above Wesfarmers' $2.25 per share conditional cash offer made in March. The jump added $206 million to Lynas' market cap in a session.

In a statement on Friday, Wesfarmers, which owns Bunnings, Kmart and Officeworks, indicated its proposal to acquire Lynas was still live.