A group of Chinese investors who dominate the investor base of rare earth miner Northern Minerals, which owns one of Australiaโs most significant critical mineral deposits, have been ordered by federal Treasurer Jim Chalmers to divest their shareholdings.
Six companies and individuals based in China, Hong Kong and the British Virgin Islands were issued government orders to divest millions of shares that they hold in the company on Monday. They have 14 days to sell their holdings under the order.
The federal government has been battling Chinese investors who have previously attempted to circumvent orders to sell down stakes in Northern Minerals by shifting around millions of dollars of shares, instead of offloading them.
The latest order issued by the treasurer targets two individuals โ Chuanyou Cong and Zhongxiong Lin โ as well as four other companies: Hong Kong Ying Tak, Real International Resources, Qogir Trading & Service Co., and the minerโs largest investor: Vastness Investment Group.
Combined, the entities control about 17.5 per cent of Northern Mineralsโ stock. The minerโs share price slumped more than 4 per cent in morning trade.
The federal government has become increasingly worried about Chinese efforts to control the supply of critical minerals and the rare earths needed to manufacture military hardware, lasers, satellites and important products that power the modern economy such as electric motors and wind turbines.
Northern Minerals owns a tenement called Browns Range in Western Australiaโs Kimberley, a top-tier project that has some of the worldโs richest concentrations of the rare earths that could break Chinaโs global production stranglehold of critical minerals. The heavy rare earths dysprosium and terbium found in Browns Range are essential for making valuable heat-resistant permanent magnets.
โThis decision was entirely consistent with advice from Treasury and the Foreign Investment Review Board, and is about protecting our national interest and ensuring compliance with our foreign investment framework,โ Chalmers said.
For the past four years, Northern Mineralsโ board has been under siege from its shareholder base.
Itโs been hostage to a series of board power grabs linked to Chinese investors that upended the tenure of former executive chairman Nick Curtis in 2024 and, in early March, threatened to do the same to current chair, former Perth-based HFW law firm partner, Adam Handley.
Chinese group Vastness Investment, the companyโs biggest investor with a 7.7 per cent holding, withdrew a bid in March to oust Handley through an extraordinary general meeting. Vastness didnโt give a reason for its original attempt to ditch Handley, or why it withdrew.
โWe are committed to complying with all the rules and regulations including those pertaining to our ASX listing and shareholding transparency. This extends to full transparency with government agencies, both in Australia and overseas,โ Handley said in a statement on March 3.
Northern Minerals signed a $320 million funding deal with the Export-Import Bank of the United States and Export Finance Australia late last year, a sensitive financial underwriting that has intensified scrutiny of its investor base.
The opaque share purchases and covert and overt attempts to control Browns Rangeโs valuable payload first dragged Chalmers into battle with multiple shareholders in 2024, forcing him to use unique foreign investment laws for the first time since they were introduced in 1975.
Court files released in September last year detailed the governmentโs claim against one Chinese-linked investor, Indian Ocean International Shipping and Services Company. Indian Ocean and its directors then faced legal proceedings for allegedly breaching Australiaโs foreign investment laws.
The Supreme Court found that one investor, a Chinese national Jing Tian, secretly held stock on behalf of Indian Ocean. For that infraction, Indian Ocean and Tian were issued with a $14 million fine by the court on January 30.
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Simon Johanson is a business journalist at The Age and The Sydney Morning Herald.Connect via X or email.
