The Chinese group Yuxiao Fund, along with four associates having ties to major Chinese conglomerates, will be compelled to reduce their shareholdings in Northern Minerals, a strategic rare earths miner, as the federal government deemed the acquisition contrary to "our national interest."
Northern Minerals is developing the Browns Range heavy rare earths project in the north of Western Australia and has a deal with Iluka Resources to supply feed for the latter's Eneabba rare earths refinery, currently under construction near Perth. The Federal government has already provided $1.25 billion to assist Iluka in financing the refinery, with Iluka requesting additional funds to cover rising construction and other expenses.
Media reports from last November indicated that Singapore-registered Yuxiao was closely associated with major Chinese groups, including China Northern and Shanghai-listed Shenghe Resources, among others.
Northern Minerals expressed suspicions about share trading and requested the Foreign Investment Review Board to investigate, which it did. The decision was outlined in a disposal order from Treasurer Jim Chalmers on Sunday night.
The order stipulated that Yuxiao Fund must dispose of 80 million shares it acquired in September within 60 days. Yuxiao Fund is the Singapore-registered private investment vehicle of Chinese national Wu Yuxiao, as per previous media reports. Northern Minerals stated that the fund was controlled by Wu Tao, the chairman of mainland China-based Jinan Yuxiao Group.
Yuxiao Fund was previously restricted by the Australian government from increasing its stake in Northern Minerals in February 2023. Other foreign shareholders ordered to divest their shares within 60 days include Ximei Liu, Xi Wang, and Black Stone Resources, according to the notice.
Northern Minerals announced in a statement to the ASX on Monday morning that the order pertains to "5 existing shareholders of the Company (who are) to divest a total of 613,573,632 fully paid ordinary shares in the Company (approximately 10.4% of the issued capital of the Company)."
Iluka Resources holds 19.9% of Northern Minerals.
Last week, Northern Minerals Chairman Nick Curtis stepped down from the company's board, transitioning to a "strategic adviser" role, as per a statement from the company. Northern Minerals shares eased 2.8% in early trading on Monday.
