The largest shareholders in the rare earths company “Northern Minerals Ltd” have been asked to sell their shares by the Australian government. Canberra has now intervened twice in the past two years in an effort to shield the business from investors with ties to Beijing.
According to a Treasury statement, six shareholders in the A$229 million ($163 million) firm must sell their stakes in the span of two weeks from 18th May (Monday). It added that five of them are registered in Hong Kong or China while one is in the British Virgin Islands.
These have been identified as Hong Kong Ying Tak Ltd, Real International Resources Ltd, Qogir Trading & Service Co. Ltd, Chuanyou Cong, Vastness Investment Group Ltd and Zhongxiong Lin. The Beijing-based Vastness Investment Group tried to oust the chairman of the firm before withdrawing its bid earlier this year.
According to Australian Treasurer Jim Chalmers, the action was taken in response to apprehensions that Chinese parties had attempted to seize control of the rare earth mining. The Browns Range heavy rare earths project in Western Australia is being developed by Northern Minerals as Western governments are attempting to reduce China’s control over the sector. Industries including semiconductors and defence depend heavily on rare earths.
Chalmers conveyed that the move is aimed at protecting the nation’s interests and guarantee adherence to its regulations governing foreign investment. “We operate a robust and non-discriminatory foreign investment framework and will take further action if required to protect our national interest in relation to this matter,” he outlined.
Northern Minerals declared that it was aware of the directives and was contemplating about the future course. Its shares were trading at less than half the price of the equity it offered in a placement last October, having dropped more than 8% to A$0.022.
Moreover, its shareholder profile has been the target of government interventions in recent years. The first occurred in 2024 and mandated five Chinese entities to surrender their shares on the basis of national interest. Australian officials discovered that some of them made the transaction to a linked Hong Kong-based investor Ying Tak.
Tak was prohibited from selling its shares and casting a vote at the corporation’s annual meeting by an interim order issued by Chalmers in April. It is one of the six businesses specified in the fresh order to dispose of their shares. Chalmers similarly prevented Yuxiao Fund, an investment vehicle with relations to China, from growing its ownership in the business in 2023.
Data showed that four of the entrants, comprising top investor Vastness Investment with almost 7%, are the biggest holders, reported Bloomberg. According to information, the six firms collectively own over 27% of the outstanding float. Early on Monday, the stock was put on hold during Sydney trading.
Beijing has practically monopolised the production and processing of rare earths and has used export restrictions as a tool in trade disputes. The latest development has transpired in the wake of a protracted dispute over ownership of the business, which is seeking to develop its Browns Range Heavy Rare Earths Project in the East Kimberley with the goal of producing large amounts of terbium and dysprosium, essential elements for magnets used in clean energy, military, and computer technologies.
Northern Minerals is already on pace to get roughly $500 million in finance from the Export Import Bank of the United States and is viewed as a crucial player in initiatives by both the countries to challenge China’s grip on the vital minerals supply chain.
