Australia Tells China-linked Investors to Divest Rare Earth Stakes
The Australian government has requested that the major shareholders of the rare earths company “Northern Minerals Ltd” divest their shares.
Canberra has intervened on two occasions in the last two years to protect the company from investors connected to Beijing.
As per a Treasury announcement, six shareholders in the A$229 million ($163 million) company are required to divest their shares within two weeks starting from 18th May (Monday). It stated that five of them are registered in China or Hong Kong, while one is located in the British Virgin Islands.
The entities recognized are Hong Kong Ying Tak Ltd, Real International Resources Ltd, Qogir Trading & Service Co. Ltd, Chuanyou Cong, Vastness Investment Group Ltd, and Zhongxiong Lin. The Vastness Investment Group, located in Beijing, attempted to remove the company's chairman before retracting its offer earlier this year.
Australian Treasurer Jim Chalmers stated that the measure was implemented due to concerns that Chinese entities had tried to take over the rare earth mining operations.
Northern Minerals is developing the Browns Range heavy rare earths project in Western Australia as Western nations seek to lessen China’s dominance in the industry. Sectors such as semiconductors and defense rely significantly on rare earth elements.
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Chalmers stated that the action is intended to safeguard the nation's interests and ensure compliance with its rules regulating foreign investment. “We maintain a strong and impartial framework for foreign investment and are prepared to take additional steps if necessary to safeguard our national interests regarding this issue,” he stated.
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Northern Minerals stated that it recognized the directives and was considering its future actions. Its shares were trading below half the value of the equity it presented in a placement last October, having fallen over 8% to A$0.022.
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Additionally, its shareholder composition has faced government interventions in recent years. The initial incident took place in 2024 and required five Chinese organizations to relinquish their shares due to national interest. Australian authorities found that a portion of them conducted the transaction with a connected investor in Hong Kong, Ying Tak.