Northern Minerals has large tenements in Western Australia – near the Northern Territory border – rich in dysprosium,a rare element used in magnets for wind turbines and electrical vehicles that resists demagnetisation at high temperatures.
Jin Chalmers’ order on Monday is the first divestment notice he has made after more than two years in the job.Dominic Lorrimer
The Singapore-registered Yuxiao Fund controlled by Chinese businessman Wu Tao,along with four other entities,holds shares in the mining developer.
Tao and the others must sell shares worth 10.37 per cent of Northern Minerals’ register within the next 60 days.
Tao’s Yuxiao is battling for control of the miner,changing the composition of the company’s board,which is developing the strategically important Browns Range project.
The fund had been pushing to get rid of the miner’s chairman,Nick Curtis,at a scheduled extraordinary general meeting this month which was cancelled after Curtis resigned last week as chairman.
He was replaced by Adam Handley,who,,described Curtis’ resignation as creating an “alignment” between shareholders and the board.
Rare earths and elements such as copper,lithium,nickel,cobalt and graphite are essential to the electrical conduits,batteries,magnets,circuitry and other components that power electric vehicles,defence applications and modern energy networks.
China dominates global production and supply of rare earths,and Western governments,including Australia’s,are scrambling to build local refining capacity and protect their supply chains.
The Albanese government’s May budget to a critical minerals production tax incentive to underpin 10 per cent of processing and refining costs for 31 critical minerals.
Western governments,including Australia’s,are scrambling to build local capacity in rare earths.Supplied
Chalmers’ order on Monday requires Tao’s fund and four of his associates to significantly reduce their shareholdings in Northern Minerals,and is the first divestment notice the treasurer has made after more than two years in the job.
“The decision,based on advice from the Foreign Investment Review Board,is designed to protect our national interest and ensure compliance with our foreign investment framework,” Chalmers said.
“Australia operates 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 said.
Tao was previously blocked by the treasurer in February last year from increasing his holding in Northern Minerals to 19.9 per cent,acting on FIRB advice.
The Chinese businessman is also seeking election to the board of Northern Minerals at its annual general meeting on June 6,a desire that may be frustrated by other shareholders after the divestment order.
Curtis asked the FIRB in October last year to probe concerning purchases of Northern’s shares around the time Tao’s Yuxiao signed a co-operation agreement with China Northern and Shanghai-listed Shenghe Resources in front of a host of Communist Party officials,the Financial Review has previously reported.
Northern Minerals’ board said in a statement to the ASX that it co-operated fully with the FIRB’s investigation but “was not – nor should have been – involved in determining the final outcome of FIRB’s deliberations or the treasurer’s order made today”.
The order has no impact on Northern Minerals’ strategy to develop its 100 per cent-owned,globally significant Browns Range heavy rare earths project in Western Australia and supply xenotime concentrate to ASX-listed Iluka Resources’ under-construction rare earths refinery,it said.
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