Australia blocks Chinese fund from increasing stake in rare earths producer
Sydney, Australia, Mar 1 (EFE).- The Australian government confirmed Wednesday that it has banned a Chinese-linked investment fund from increasing its stake in Australian mining company Northern Minerals, which extracts rare earths, or elements used in the technology and defense industry.
“I made that decision based on the advice of the Foreign Investment Review Board and consistent with other decisions taken by other governments in the past,” Australia’s Treasurer Jim Chalmers told reporters in Canberra, adding he would not comment further, according to state-owned broadcaster ABC.
Yuxiao, which according to Reuters is the Singapore-registered private company of Chinese mining investor Yuxiao Wu, had applied to the Australian Foreign Investment Review Board to authorize an increase in its shares in Northern Minerals from 9.9 percent to 19.9 percent.
However, the board – which evaluates the risk that foreign investments pose to national security – turned the plan down, following which Chalmers blocked the company from increasing its stake, without making the decision public.
Northern Minerals operates a mine in the remote area of Kimberly, Western Australia, which extracts rare earths like dysprosium, a material used for the manufacturing of electric vehicles and wind turbines, among other high-tech products.
It is not the first time that the Australian government has blocked a Chinese entity from investing in Northern Minerals. In 2020, the conservative government at the time restricted investment group Baogang from securing 11.1 percent shares in the company, ABC reported.
Currently, Australia produces almost half of the world’s lithium and is the second largest producer of cobalt and fourth largest of rare earths, according to the authorities.
In March 2023, the Australian government announced a plan to increase domestic processing of rare earths in order to avoid depending on China, which accounts for about 70 to 80 percent of worldwide production.
The United States and the European Unión are looking to contain the dependency on rare earths imports, with measures ranging from the search for new deposits to encouraging investment in domestic refining, processing and recycling. EFE