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.
The fund had sought Foreign Investment Review Board approval to raise its ownership to 19.9 per cent in 2022, from 9.81 per cent of Northern Minerals, but was declined last year.
Northern Minerals 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.
Northern Minerals Chairman Adam Handley said in a statement that it had referred certain share buying activity to the Foreign Investment Review Board to investigate last October.
“Northern Minerals made the referral to FIRB because of our duty to act in the best interests of all shareholders, ensure the integrity of the company’s share register and uphold our high standards of good governance,” he said, adding that it would have no impact on its development of the Browns Range mine.
In aggregate, the number of shares that must be divested amounts to around 10.4 per cent of Northern Minerals’ issued share capital, it noted, which, added to Yuxiao Fund’s holdings, would come close to 20 per cent, the point at which a party would have to declare its intentions under Australian takeover law.
“The Treasurer has issued orders that Yuxiao Fund Pte Ltd and four associates reduce their shareholdings in Northern Minerals,” Chalmers’ office 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 is set to supply Iluka Resources’ Eneabba rare earths refinery under construction in Western Australia, which already has a A$1 billion (US$663 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.
Chalmers’ office said Australia’s foreign investment framework did not discriminate against any nation.