Australia scrutinises China-linked rare earth investors

Australia's economy minister increased scrutiny on Monday of China-linked investors in Northern Minerals, a critical minerals company whose Browns Range rare earths project has been pitched as a future non-China source of key materials.

Northern Minerals said new conditions on two shareholders, Hong Kong-registered Qogir and Virgin Isles-registered Real International Resources, will require the Australian government to vet any share sale they make. The company said the review is intended to ensure that the buyer is not an associate of the foreign person.

The move follows earlier government orders for several China-linked shareholders to sell their stakes. Economy Minister Jim Chalmers in May ordered six Northern Minerals shareholders with links to China, controlling 17.5% of the company, to sell by July 2.

Three had not complied by July 14, prompting a new order preventing them from voting on company decisions.

Northern Minerals has promoted its Browns Range mine as a “future cornerstone of non-China supply” of the heavy rare earths dysprosium and terbium, which are used in defence and digital technologies. The company has been in talks with US government funding agencies, but its progress has been frustrated by the shareholder dispute.

The United States has stepped up efforts to find new sources of critical minerals after China restricted exports last year. US President Donald Trump announced last week US$3 billion in US investment in critical minerals projects, including a US$400 million conditional Pentagon loan to an Australian rare earth mine in New South Wales.

Australia's foreign investment regulator in 2023 blocked a Chinese shareholder from doubling its stake in Northern Minerals on national interest grounds. The following year, the shareholder group sought to oust the miner's management.

Northern Minerals executive chairman Adam Handley welcomed the new scrutiny on Monday. The company said last month that the order for shareholders to sell was an important step in aligning its share register with Australia's national security interests.