Chalmers claims ban on China-backed entities trying to get hands on WA deposit crucial to national security

The Prime Minister says a decision to remove a group of Chinese investors from one of the country’s most significant critical mineral deposits is about protecting Australia’s national interest and sovereignty. On Monday six companies and individuals based in China, Hong Kong and the British Virgin Islands were issued orders by the Treasurer to divest millions of shares that they hold in Northern Minerals after previous formal directions were ignored. The company entered a trading halt shortly after Jim Chalmers directed Hong Kong Ying Tak Ltd, Real International Resources Ltd, Qogir Trading & Service Co Ltd, Chuanyou Cong, Vastness Investment Group Ltd and Zhongxiong Lin — to sell their holdings within 14 days. Together, the six hold an interest of almost 1.7 billion shares worth just under $41 million — or about 17.6 per cent of the rare earths miner which has its headquarters in Perth. Monday’s order — made via the Foreign Investment Review Board — is the latest development in the long-running saga targeting little-known Chinese-linked investors thought to be stalking Northern Minerals that has hampered efforts to advance its strategic Browns Range project in the East Kimberley. Northern Minerals is seen as a key player in efforts by Australia and the US to breaking China’s stranglehold on the critical minerals supply chain and has received support from Export Finance Australia and the US Export-Import Bank. Five of the investors ordered to divest their shareholdings in the $229 million WA company are registered in China, according to the FIRB, and one in the British Virgin Islands. “Chinese investment in Australia is, of course, legitimate, but it’s the job of the Foreign Investment Review Board and the Treasurer, of course, to get those reports to make sure that Australia’s national interest is looked after,” Mr Albanese told ABC Perth. “One of the things that we have said is that when it comes to critical minerals, rare earths, some of these essentials we want Australian ownership of it, because it’s so important for our sovereignty going forward.” Western nations, including Australia and the US, have attempted to limit Chinese investment in so-called critical minerals and metals key for defence industries and the energy transition. Beijing has a near-monopoly on rare earth production and processing and has weaponized export controls during trade disputes with the Trump administration since last year. “This decision was entirely consistent with advice from Treasury and the Foreign Investment Review Board. It’s about protecting our national interest and ensuring compliance with our foreign investment framework,” Dr Chalmers told reporters. “We operate a robust and non‑discriminatory foreign investment framework and we will take further action if it’s necessary to protect our national interest in relation to this matter.” In a statement released after it hit pause in trading of its shares, Northern Minerals said it was “currently considering the new disposal orders and will make a further announcement once it has done so”. It also noted a FIRB direction from April 1 regarding an additional 361.5 million shares in the company held by Hong Kong Ying Tak remained in effect. In a letter to Northern Minerals less than two months ago, the FIRB said it believed Chinese company Black Stone and individuals Xi Wang and Ximei Liu breached a compulsory share divestment order from Dr Chalmers in 2024 by transferring shares to Hong Kong Ying Tak. Hong Kong Ying Tak was at the time subsequently been banned from voting those 361.5 million Northern Minerals shares, or about 4 per cent of the company, at the WA-based group’s delayed AGM, which must be held by July. The latest order comes a month after Northern Minerals’ biggest shareholder, Beijing-based Vastness Investment Group, with 7.7 per cent, abruptly aborted attempts to overthrow Northern Minerals’ chair, Adam Handley, withdrawing a notice to requisition a shareholders meeting. The AGM was originally scheduled for November last year but has now been postponed twice after the company referred a series of what it described as “relevant matters” to FIRB. The upcoming meeting will also consider applications made by other Chinese-linked candidates to seize board seats. This boardroom tussle is thought to be part of a co-ordinated Chinese state-backed campaign to covertly seize control of Northern Minerals, which is seeking to develop the Browns Range rare earths project. The development is seen as important in helping break China’s stranglehold on critical minerals viewed as vital to the energy transition and defence hardware. Shares in the thinly-traded Northern Minerals were down 4.17 per cent to 2.3¢ at the end of Monday’s trading on the stock exchange. Chinese Foreign Ministry spokesman Guo Jiakun said though he was not aware of the situation, China opposed national security being overgeneralised and interfering in normal investment. Australia should earnestly respect the legitimate rights and interests of Chinese investors and provide a fair, transparent and non-discriminatory business environment for foreign investment, he said, according to a report in the Beijing-based Global Times. Earlier this year a visiting senior Trump administration official told Australia’s mining sector that critical minerals will become one of the central pillars of the US alliance as both nations work together to end their reliance on supply from China. During a March speech to the Minerals Council of Australia, Donald Trump’s hand-picked critical minerals tsar Joshua Kroon highlighted the need for “sustained investment in exploration, mining, processing, and refining” in the sector. “Our countries have long been security allies and economic partners. But over the past several years, our cooperation has taken on an even greater strategic dimension: building resilient, allied supply chains for critical minerals.” The Deputy Assistant Secretary of the US Department of Commerce also praised Australia for bringing “extraordinary mineral resources and world-class mining expertise” to joint efforts.