Australia orders China-linked investors to sell stakes in rare earths firm

AFP | Sydney

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Australia ordered a string of China-linked shareholders to sell their stakes in a rare earths firm on Monday, citing the need to protect the sector from foreign control.

Northern Minerals is vying to challenge China’s dominance in producing dysprosium, a rare earth mineral used to make high-performance magnets used in electric vehicles.

Chinese investors have been snapping up shares in an effort to exert sway over the firm -- on one occasion even launching a bid to topple its chair.

Wary of a stealth takeover, the company referred itself to Australia’s foreign investment review board in November 2025. Treasurer Jim Chalmers said six shareholders would be forced to exit Northern Minerals.

“We operate 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 in a statement.

Three of those shareholders had addresses listed in China, two were listed in Hong Kong and one was listed in the British Virgin Islands.

The list included some of Northern Minerals’ largest single shareholders, including Beijing-based Vastness Investment Group, which held more than six percent of the firm.

Vastness tried to use its sizeable stake to replace the chair of Northern Minerals earlier this year.

It eventually withdrew its bid to vote on the company’s leadership at an extraordinary general meeting.

Hong-Kong based Qogir Trading and Service Company separately holds almost five percent of Northern Minerals.

Asked about Australia’s order, the Chinese foreign ministry said it was not aware of the situation.

“China has consistently opposed the overstretching of the concept of national security to interfere with normal investment activities,” ministry spokesman Guo Jiakun told a news briefing, adding that “the Australian side should earnestly respect the legitimate rights and interests of Chinese investors”.

Australia has over the past two years waged a running battle to pry Northern Minerals away from Chinese investors.

It used the same foreign takeover laws in 2024 to force a different group of Chinese investors to sell shares in Northern Minerals.

Northern Minerals said it was “currently considering the new disposal orders and will make a further announcement once it has done so”.