In a move highlighting Australia’s efforts to build a rare earths supply chain independent of China, a Chinese mining investor has failed in its bid to join the board of Australian rare earths company Northern Minerals (NTU.AX).
Earlier this week, Australian Treasurer Jim Chalmers had ordered several China-linked investors, including Yuxiao Fund, to dispose of their shares in Northern Minerals, amounting to 10.4% of the company’s issued share capital. This was done on national interest grounds, as Australia and its Western allies seek to reduce reliance on China, which supplies around 90% of the world’s permanent magnets used in various industries.
At Northern Minerals’ annual shareholder meeting on Thursday, the nomination of Yuxiao Fund’s ultimate controller, Chinese national Wu Tao, to join the company’s board was one of four board candidates that failed to be elected. Two other board candidates proposed by entities and individuals linked to Yuxiao Fund were also rejected.
The failed board bid comes after Yuxiao Fund had sought, but was denied, Foreign Investment Review Board approval to raise its ownership in Northern Minerals to 19.9% from 9.81% in 2022.
Northern Minerals is a producer of heavy rare earths, which are more sought after by China. The company’s shares closed up 7% on the day.
Separately, Northern Minerals revealed this week that some of its corporate, operational and financial data had been released on the dark web following a cyberattack in March. However, the company’s executive chairman, Adam Handley, stated that the cyberattack and the divestiture order were not linked.
The failed board bid by the Chinese investor and the Australian government’s move to order the disposal of shares highlight the increasing reliance of rare earths miners on government support, as well as the strategic importance of securing critical mineral supplies outside of China’s dominance.