Australia Orders Chinese Investors to Sell Stake in Rare Earths Miner

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Northern Minerals fully owns the Browns Range in Western Australia

Australia has ordered several China-linked investors to sell their stake in rare earths mining company Northern Minerals citing the national interest as the country tightens control over the minerals key to new energy transitions.

Treasurer of Australia Jim Chalmers signed orders telling Yuxiao Fund and four associates to dispose of their shareholdings in Northern Minerals within 60 days, according to a Monday statement. The five shareholders together hold 10.4% of the Australian miner.

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Australia ordered China-linked investors, including Yuxiao Fund, to sell their 10.4% stake in Northern Minerals within 60 days, citing national interests.
The Foreign Investment Review Board advised the sale to protect national interests and enforce foreign investment laws.
Australia heightened scrutiny on foreign investment in critical minerals like rare earths, following a 2021 regulatory reform requiring approval for stakes over 10%.

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Who’s Who

Jinan Yuxiao Group Co. Ltd.: Jinan Yuxiao Group Co. Ltd. is a private mining firm based in Shandong, China. In August 2023, it became a major shareholder in Australian rare earths mining company Northern Minerals. The controlling shareholder of Jinan Yuxiao is Wu Tao, and his son, Wu Yuxiao, controls the Singapore-registered Yuxiao Fund.

Northern Minerals: Northern Minerals is an Australian rare earths mining company that fully owns the Browns Range in Western Australia, the country's only heavy rare earth project with a reserve of around 10.81 million tons. The company has been subject to foreign investment scrutiny, with several China-linked investors recently ordered to sell their stakes. Rare earths are vital for new energy technologies, and Australia has stringent regulations on foreign investment in critical minerals.

CATL: CATL-backed Yibin Tianyi Lithium Industry Co. Ltd. had previously planned to acquire Australian lithium miner AVZ Minerals. However, they dropped the plan due to regulatory hurdles. This instance is mentioned in the context of increased scrutiny and regulation on foreign investment in Australia’s critical minerals sector.

AVZ Minerals: AVZ Minerals is an Australian lithium miner that faced regulatory hurdles related to foreign investment. In April 2020, CATL-backed Yibin Tianyi Lithium Industry Co. Ltd. dropped its plan to acquire AVZ Minerals due to these regulatory challenges. The case highlights Australia's stringent controls over foreign investment in critical minerals.

Black Stone Resources: Black Stone Resources is a British Virgin Islands-registered entity that was ordered by the Australian Treasurer to sell its shares in Northern Minerals. As of the third quarter of 2023, Black Stone Resources made its first purchase of Northern Minerals, holding a 2.82% stake in the company. The sale order is part of Australia's effort to protect its national interest in the critical minerals sector.

Indian Ocean International Shipping and Service Company: Indian Ocean International Shipping and Service Company, registered in the United Arab Emirates, is one of the foreign shareholders ordered to dispose of its shares in Northern Minerals by the Australian government. The compelled sale comes as part of Australia's move to tighten control over its critical minerals sector, following advice from the Foreign Investment Review Board to protect the national interest.

Baotou Iron and Steel Group: Baotou Iron and Steel Group is a Chinese company that proposed a A$20 million acquisition to acquire an 11.1% stake in Northern Minerals in April 2020. The acquisition was rejected by Australia’s then Treasurer, Josh Frydenberg. The attempt was part of broader concerns over foreign investment in Australia's critical minerals sector.

Yibin Tianyi Lithium Industry Co. Ltd.: Yibin Tianyi Lithium Industry Co. Ltd., which is backed by CATL, dropped its plan to buy Australian lithium miner AVZ Minerals due to regulatory hurdles. This occurred concurrently in April 2020 when Australia's then Treasurer Josh Frydenberg rejected a proposed acquisition by China’s Baotou Iron and Steel Group to acquire an 11.1% stake in Northern Minerals.

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What Happened When

April 2020：: Australia’s then Treasurer Josh Frydenberg rejected an A$20 million acquisition proposed by China’s Baotou Iron and Steel Group to acquire an 11.1% stake in Northern Minerals.

2021：: Australia reformed its Foreign Investment Framework, requesting foreign investors to seek approval for holding more than 10% of Australian miners in the critical minerals sector.

Early 2023：: Yuxiao Fund sought to increase its stake in Northern Minerals to 19.9%, but this was rejected by Treasurer Jim Chalmers.

August 2023：: Jinan Yuxiao Group Co. Ltd. became a major shareholder in Northern Minerals.

By the third quarter of 2023：: Yuxiao Fund sold more than 400 million shares, reducing its stake in Northern Minerals to 1.35%. Black Stone Resources, Ximei Liu, and Xi Wang made their first purchases, holding 2.82%, 1.69%, and 1.69% respectively.

Monday：: Treasurer of Australia Jim Chalmers signed orders telling Yuxiao Fund and four associates to dispose of their shareholdings in Northern Minerals within 60 days.

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