Treasurer orders China fund to cut stake in Northern Minerals
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The news: The federal government has ordered Yuxiao Fund and four associates to cut their shareholdings in rare earths explorer Northern Minerals.
The numbers: The decision, issued by the Treasurer on advice from the Foreign Investment Review Board (FIRB), ordered Yuxiao Fund to dispose of 80 million shares in Northern Minerals, which it acquired in September 2023, within 60 days.
It ordered another four associates of Yuxiao to divest roughly 532 million shares in all, within 60 days. Northern Minerals shares last traded at 3.6 cents each.
The context: Yuxiao is Northern Minerals’ biggest shareholder, controlling more than 10% of the company’s equity. Last year, the Treasurer blocked the fund from acquiring an additional 9.92% stake in the company.
A fresh FIRB probe was opened after the fund was accused of a covert attempt to gain control of the company and sought to remove executive chair Nick Curtis from his position. Northern Minerals is developing the strategically important heavy rare earths Browns Range project in Western Australia, which holds a large deposit of dysprosium and terbium, used in high-performance magnets, batteries and defence equipment.
On Monday, a Treasury spokesperson said the divestment orders issued to Yuxiao and four associates were based on advice from the FIRB and designed to protect national interest and ensure compliance with Australia’s foreign investment framework.
What they said: “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,” a treasury spokesperson said in a statement.
The source: Treasury
