Australia’s Treasurer Jim Chalmers has ordered several investors with ties to China to reduce their stake in the rare earth mineral company Northern Minerals, citing national interests.
Northern Minerals is developing the Browns Range heavy rare earth project in Western Australia, a sector that has gained strategic importance in the fields of green energy and defense. According to Reuters, Chalmers’ order issued on Sunday directs the Yuxiao Fund to dispose of its 80 million shares purchased last September within 60 days.
“This decision was made based on the recommendation of the Foreign Investment Review Board (FIRB), aimed at protecting our national interests and ensuring compliance with our foreign investment framework,” the Treasurer’s spokesperson said in a statement on Monday.
The four associated parties mentioned by The Australian are Black Stone Resource, Indian Ocean International Shipping and Service Company, Ximei Liu, and Xi Wang. The Yuxiao Fund, though registered in Singapore, is controlled by Chinese businessman Wu Tao, according to Northern Minerals.
The company’s Chairman, Adam Handley, stated that the move was necessary to act in the best interests of all shareholders and uphold the integrity of the company’s share registry and high governance standards. He reassured that this would not impact the development of the Browns Range mine.
In light of efforts by Western countries to reduce dependence on China as a major producer of rare earths, Australia is seeking friendly nations to develop its critical minerals industry. Australia reviews foreign investments in key sectors, including critical minerals, for national security reasons and has blocked some transactions that anger Beijing.
This latest action by Australia comes ahead of Chinese Premier Li Keqiang’s visit at the end of June. Chinese Foreign Minister Wang Yi, during his visit to Australia in March, expressed hope that Australia would ensure a non-discriminatory market environment for Chinese companies.
Australia’s foreign investment framework, as stated by the Treasurer’s spokesperson, does not discriminate against any country. Rare earths are used in manufacturing wind turbines, electric vehicles, and the defense industry. China controls 70% of rare earth mining and 90% of processing capacity, according to the International Energy Agency.
Australia sees rare earths as a key component of its critical mineral strategy and aims to help its businesses develop supply chains outside of China’s influence.