CANBERRA, Australia, Monday, June 10, 2024 – The Australian government on June 2, 2024, ordered several China-linked investors to divest their shares in Northern Minerals, a strategic rare earths miner, citing national security concerns. 1
The move, announced by Treasurer Jim Chalmers on Monday, follows advice from the Foreign Investment Review Board (FIRB). The specific number of investors and the value of their holdings were not immediately disclosed.
Jim Chalmers directed Yuxiao Fund and four other China-linked companies to sell their shares in Northern Minerals Limited, which operates the Browns Range mine in Western Australia’s east Kimberley.
Tao and his associates are required to divest shares equivalent to 10.37% of Northern Minerals’ registry within the upcoming 60 days.
Globally, China controls 70 per cent of rare-earths mining and 90 per cent of processing capacity, according to the International Energy Agency.
Rare earths are a group of 17 specialized elements used in a variety of high-tech products, from electric vehicles and wind turbines to smartphones and fighter jets. China currently controls a dominant share of the global rare earths market.
The company aims to become the first major producer of dysprosium, a crucial component for electric vehicles, outside of China.
The divestment order comes amid heightened tensions between Australia and China, with concerns in Canberra about Beijing’s growing influence in the region.
In the statement, Chalmers emphasized the necessity of the divestment to “protect our national interest,” noting that the shares total 10.4% of Northern Minerals’ issued capital. He added that Australia maintains a robust, non-discriminatory foreign investment framework and will act further if required.
Last year, Chalmers blocked Singapore-registered Yuxiao Fund from nearly doubling its stake in Northern Minerals, based on FIRB’s recommendation. Reuters reported that the fund is an investment vehicle for Chinese national Yuxiao Wu, who owns rare earth mines in Mozambique that supply China.
Northern Minerals’ board confirmed the treasurer’s decision, citing inconsistency with the Foreign Acquisitions and Takeovers Act 1975 and a previous prohibition order. The company is expected to release soon a feasibility study estimating the cost of building a dysprosium processing plant at up to $300 million.
Read also the report by Mining Weekly
- abc.net.au: https://www.abc.net.au/news/2024-06-03/northern-minerals-jim-chalmers-yuxiao-fund-investors/103927762[↩]
