Malaysian protesters rallied Sunday against plans to open a rare earth processing plant in an eastern resort town saying they fear it will harm the environment.

Thousands attended the sunrise gathering at a seaside park in Kuantan to oppose plans by Australian miner Lynas Corp to open the plant near the town in eastern Pahang state, said activist Tan Bun Teet.

Activists and residents have long campaigned against the development, which is under construction, amid fears over the disposal of radioactive waste from the process.

Holding banners reading "Lynas get out" and umbrellas with an anti-nuclear sign, protesters chanted "long live the people" and urged the government to act in to protect the area.

"We deserve a healthy environment for our future generations. The government can't just build anything in the name of development," Tan, who chairs a local group that campaigns against Lynas, told AFP.

He said the gathering was also protesting against other issues, such as land being taken from native tribes and toxic cyanide being used in gold mining.

A district police official confirmed a "small group" gathered for several hours before peacefully dispersing.

Lynas has insisted the plant, which would be one of the few sources of rare earths outside China, poses no safety threats, and any waste would be placed in reliable storage cells to avoid leaks.

The Lynas Advanced Materials Plant (LAMP) was scheduled to start processing rare earths imported from Australia for use in high-tech products from iPods to missiles in the third quarter of this year.

But in June, Malaysia said Lynas must comply with safety recommendations made by an international atomic energy panel before it can operate its rare earth plant. Lynas has pledged to meet all recommendations.