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

Australian Treasurer Jim Chalmers has ordered several China-linked investors to dispose of shares in rare earths miner Northern Minerals 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 Chairman Adam Handley in a statement to Reuters said that it had referred certain share buying activity to the FIRB 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% of Northern Minerals' issued share capital, it noted, which, added to Yuxiao Fund's holdings, would come close to 20%, the point at which a party would have to declare its intentions under Australian takeover law.

Northern Minerals has said the fund was controlled by Wu Tao, the chairman of mainland China-based Jinan Yuxiao Group. Other foreign shareholders ordered