Australia orders Chinese investors to sell down stake in rare earths miner (updated)

Northern Minerals

03/06/2024 04:05

(Adds detail, no comments in paragraph 6, 11-14)
    By Kirsty Needham and Melanie Burton
       SYDNEY, June 3 (Reuters) - Australian Treasurer Jim
Chalmers has ordered several China-linked investors to dispose
of shares in rare earths miner Northern Minerals  NTU.AX  on
national interest grounds, a spokesperson said on Monday.
    Northern Minerals is developing the Browns Range heavy rare
earths project in Western Australia, at a time when the sector
has become increasingly strategic for its uses in green energy
and defence.
     A disposal order issued by Chalmers on Sunday said Yuxiao
Fund had 60 days to dispose of 80 million shares it bought in
September. Yuxiao Fund is the Singapore-registered private
investment vehicle of Chinese national Wu Yuxiao, Reuters has
previously reported.
    The fund had sought Foreign Investment Review Board (FIRB)
approval to raise its ownership to 19.9% in 2022, from 9.81% of
Northern Minerals, but was declined last year. 
    Northern Minerals, which had no immediate comment, has said
the fund was controlled by Wu Tao, the chairman of mainland
China-based Jinan Yuxiao Group. 
    Other foreign shareholders ordered to dispose of shares
within 60 days include Ximei Liu, Xi Wang, and Black Stone
Resources, the notice said.
    "The Treasurer has issued orders that Yuxiao Fund Pte Ltd
and four associates reduce their shareholdings in Northern
Minerals," a spokesperson for Chalmers said in a statement on
Monday.
    "The decision, based on advice from the Foreign Investment
Review Board, is designed to protect our national interest and
ensure compliance with our foreign investment framework."
    Browns Range has been cited as a potential source of feed
for Iluka Resources'  ILU.AX  Eneabba rare earths refinery under
construction in Western Australia, which already has a A$1
billion($665.10 million) funding pledge from the Australian
government and is waiting on a decision for more.
    Australia has said it is looking for friendly nations to
build out its critical minerals industry as the West diversifies
away from dominant producer China.
    Last week Northern Minerals Chairman Nick Curtis exited the
company's board. Curtis declined to comment. Shares in Northern
Minerals were little changed at A$0.035. The company's annual
general meeting is on June 6. 
   Canberra screens foreign investment in key sectors for
national security, including critical minerals, and has blocked
some Chinese deals which has irked Beijing. Australia is
preparing for a visit by Chinese Premier Li Qiang later this
month. 
    Chinese Foreign Minister Wang Yi said on a visit in March
that he hoped Australia would ensure its market environment was
not discriminatory to Chinese business.
    Chalmers' spokesperson said Australia's foreign investment
framework did not discriminate against any nation.


($1 = 1.5035 Australian dollars)

 (Reporting by Kirsty Needham in Sydney and Melanie Burton in
Melbourne; Editing by Stephen Coates)
 ((Kirsty.Needham@thomsonreuters.com;))