A Chinese businessman and four linked entities and individuals have been ordered by Treasurer Jim Chalmers to sell down their stakes in aspiring rare earths play Northern Minerals as Australia looks to keep its critical minerals out of the Middle Kingdom’s reach.
Wu Tao and the Singapore-registered investor he is said to control, Yuxiao Fund, will have 60 days to dump the 80,000,000 shares bought on September 6 last year under orders issued by the Foreign Investment Review Board.
Black Stone Resources, registered in the British Virgin Islands, will need to sell down 166,666,667 shares acquired on the same day while Indian Ocean International Shipping and Service Company must relinquish 165,035,368 shares purchased between May 12, 2022 and March 14, 2023.
The FIRB also issued orders against 100,000,000 shares owned by China-based Ximei Liu and 101,871,597 shares owned by Singapore-based Xi Wang.
The demands follow a request by Northern Minerals for the board to investigate whether Wu Tao and Yuxiao Fund tried to covertly increase their stake in the ASX-listed company in breach of a Federal Government ban.
Yuxiao was barred by Mr Chalmers in February last year from increasing its stake to 19.9 per cent.
A spokesman for Mr Chalmers said the orders were designed to protect Australia’s national interest “and ensure compliance with our foreign investment framework”.
“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,” he said.
Monday’s ruling follows a tumultuous week for the Perth-based company which is working to establish itself as a key part of the country’s rare earths supply chain through its Browns Creek project, 145km south of Halls Creek in the East Kimberley.
Yuxiao responded to its FIRB referral by Northern Minerals by using its 9.8 per cent stake in the company to requisition a shareholders meeting called for June 6 to dump executive chairman Nick Curtis and access the company’s books.
But investors were told last Monday that Mr Curtis “resigned from the role” to become a “strategic advisor” to the company.
He was replaced by prominent pro-China businessman Adam Handley, who has been a non-executive director of the company since December 2021.
Mr Handley is also the immediate past president of the Australia China Business Council WA and “specialises in advising North Asian investors and their Australian counterparts to bridge successful business relationships”, according to Northern Minerals.
The company is targeting a final investment decision for Browns Range in the March quarter of next year.
The ore from Browns Range is set to be fed into Iluka Resources’ future Eneabba rare earths refinery.