Australia’s government has ordered the biggest shareholders in rare earths firm Northern Minerals Ltd. to sell their stakes, in its latest attempt to force some Chinese investors to divest on national security grounds.
Six shareholders in the Perth-based firm must sell their stakes within two weeks from Monday, according to a statement from the Treasury. Five of them are registered in China or Hong Kong, according to the statement, and one in the British Virgin Islands.
The six entities hold almost 27% of the outstanding float, according to data compiled by Bloomberg, and include the top four shareholders. Shares in the company closed down 4.2% in Sydney, paring the company’s market value to A$219 million ($156 million).
The government initially ordered some investors to divest in 2024, telling five entities to sell their stakes in Northern Minerals. Canberra then sued a Chinese company for breaching that directive, winning the court case last year.
Hong Kong Ying Tak Ltd, one of the investors targeted on Monday, is linked to three of the entities ordered to divest in 2024, according to a statement in April from Northern Minerals. In a statement Monday, the miner said it was considering the latest orders from the Treasury and would update the market at a later time.
China’s Ministry of Foreign Affairs said it wasn’t aware of the issue, but urged Australia to respect the legitimate rights of foreign investors.
Although still down from a pre-pandemic high, direct investment from China into Australia rose last year from 2024, according to official data.
Western nations including Australia and the US have attempted to limit Chinese investment in so-called critical minerals and metals key for defense industries and the energy transition. Beijing has a near-monopoly on rare earth production and processing, and has leveraged export controls during trade disputes with the Trump administration since last year.
Northern Minerals’ Browns Range project is yet to be developed but is a sizable deposit of so-called heavy rare earth elements, which are used in military applications and advanced electronics. The asset sits in the Pilbara region of Western Australia and has received non-binding letters of support from the US and Australian governments for future development.
By James Mayger and Paul-Alain Hunt
