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Mining

Federal treasurer orders Chinese investors to sell Northern Minerals holdings

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By Colin Hay - 
Northern Minerals ASX NTU FIRB foreign shareholding sale orders
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Federal treasurer Jim Chalmers has ordered five international companies and their linked investors to divest their holdings in Northern Minerals (ASX: NTU).

Following advice from the Foreign Investment Review Board (FIRB), the treasurer used his special legal powers to order the Yuxiao Fund and four associates to sell in excess of 613 million shares in the Australian rare earths miner.

The fund is reportedly controlled by Wu Tao, chair of the mainland China-based Jinan Yuxiao Group.

National interest concerns

In a statement, the treasurer said he ordered the five companies to sell their shares, totalling 10.4% of the issued capital of Northern Minerals, “to protect our national interest.”

“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,” the statement continued.

Last year, the treasurer signed an order blocking the Singapore-registered Yuxio Fund from nearly doubling its stake in Northern Minerals after the FIRB recommended the application be turned down.

Board response

“It appears that the treasurer has concluded that the acquisition of the relevant shares was inconsistent with the requirements of the Foreign Acquisitions and Takeovers Act 1975 (Cth) and the previous prohibition order made,” the Northern Minerals board said in a statement to the ASX.

“The board of Northern Minerals is considering the contents of the instrument and will provide an update to the market should any further disclosure be required.”

In addition to the Yuxiao Fund, disposal orders have been ordered against Black Stone Resources, Indian Ocean International Shipping and Service Company, Ximei Liu and Xi Wang.

Heavy rare earths

Northern Minerals focuses on the Browns Range heavy rare earth project in Western Australia.

Its Wolverine deposit has also been identified as containing significant volumes of highly valuable dysprosium and terbium, critical elements in the magnets needed for electric vehicle drivetrains.