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Australia Orders Chinese Investors to Reduce Stake in Rare Earths Mining Company

Australian Treasurer Jim Chalmers on Sunday ordered a Chinese investment fund to sell its stake in Sydney-based rare earth mining company Northern Minerals, which he said was critical to Australia’s national interests.

“The decision is based on advice from the Foreign Investment Review Board and aims to safeguard our national interests and ensure compliance with the foreign investment framework,” a Chalmers University spokesman said. Said on monday.

“Australia operates a robust, non-discriminatory foreign investment framework and will take further steps where necessary to protect our national interests in this issue,” the spokesman said. Added.

Chalmers issued a divestment order to the investment firm Youxiao Fund, ordering it to sell 80 million Northern Minerals shares it bought in September within 60 days, representing about 10.4 percent of Northern Minerals’ total capital.

Australian Treasurer Jim Chalmers (Tracy Neary/Getty Images)

Registered in Singapore, the Yuxiao Fund is run by a Chinese investor named Yuxiao Wu and a businessman named Wu Tao. Related Along with several other conglomerates and two Chinese nationals, Xi Wang and Ximei Liu, they were all ordered to divest their shares in Northern Minerals.

The Youxiao Fund is committed to acquiring a controlling stake in Northern Minerals, a heavy rare earth mining project in Western Australia. Northern Minerals’ Browns Range mine will feed a massive rare earth refinery under construction in Western Australia that has already received $665 million in funding from the Australian government, with the possibility of more to come.

China Crushing Grip The rare earth industry makes products vital to green energy products such as electric vehicle batteries and solar panels, and the Chinese Communist Party has made it a top priority to maintain its near monopoly on rare earth supplies.

The U.S. government also Increased Funding a rare earths project to break China’s stranglehold and develop a domestic supply chain from “mine to magnet,” as the Department of Defense (DOD) succinctly puts it. The effort is explicitly intended to develop a “resilient supply chain” to replace “overseas single-point-of-failure” supply chains for defense-critical products.

Chalmers has previously blocked Youxiao from trying to double its stake in Northern Minerals to nearly 20 percent, but Sunday was the first time he ordered it to divest shares it had already bought.

November, Northern Minerals Rejected Yuxiao tried to access accounting books and marketing agreements. The company also Accused Yuxiao and his associates were plotting to oust the company’s chairman, Nick Curtis, who was resisting a Chinese takeover attempt.

Curtis filed a complaint with Australia’s Foreign Investment Review Board (FIRB), asking it to investigate allegations that Youxiao used related parties and agents to secretly buy up shares and build up a large stake in Northern Minerals, despite Chalmers limiting its stake to 9.98 percent.

Curtis Resigned On May 27, Curtis stepped down as executive chairman of Northern Minerals to become a “strategic advisor.” His resignation was apparently due to Youxiao, which owns 9.8% of the company’s shares, attempting to call a shareholders’ meeting to force Curtis’s removal. The meeting, originally scheduled for June 6, was cancelled following Curtis’ resignation.

Curtis was replaced by Adam Handley, a former non-executive director at the company and former chairman of the Australia-China Business Council, which specialized in building relationships between Australian businessmen and “North Asian investors”.

These maneuvers were apparently the final straw for Chalmers, who ordered a sale of shares to foreign rivals for control of Northern Minerals, the regulatory equivalent of kicking over a gaming table and sending Monopoly pieces flying in all directions. Threatening It was the first such dramatic action since Mr Curtis asked FIRB to investigate in November.

Some Australian mining executives are skeptical that the government can stop China from financing and ultimately controlling the rare earths industry. Peter Coleman, chairman of Arkadium Lithium, said: Said of Australian Financial Review The United States has threatened to end Australian subsidies for rare earth elements if Chinese funds flow in, but the Australian government insisted in May that Chinese investment was essential for major critical minerals projects.