Chinese investor failed to get sit on Australian rare earth metals mining company

Chinese mining investor Yuxiao Fund failed in its bid to join the board of Australian rare earth miner Northern Minerals. It comes days after the Australian Treasury ordered the investor's private company to sell some of its shares.

Earlier this week, Treasury chief Jim Chalmers ordered several China-linked investors to dispose of Northern Minerals shares, amounting to 10.4% of its issued share capital, on national interest grounds. 

Yuxiao Fund was given 60 days to sell 80 million shares of Northern Minerals acquired in September. The company was ordered not to raise its stake in February 2023.

Australia and its Western allies are seeking to build a supply chain separate from dominant producer China, which supplies about 90% of the world's magnets used in industries ranging from wind turbines to electric vehicles and defense. Rare earth miners are increasingly relying on government support. Northern Minerals is a producer of heavy rare earth metals, which are more in demand in China. The company's shares are up 7%.
The fund had sought Foreign Investment Review Board approval since 2022 to increase its stake in Northern Minerals from 9.81% to 19.9%, but was declined last year.

Northern Minerals said the ultimate controller of the Yuxiao fund is Chinese national Wu Tao. His nomination to join Northern Minerals' board failed, the company announced Thursday at its annual meeting. 

Wu Tao has mining interests in Mozambique and China, where his private company develops and operates rare earth mineral businesses. Two other board candidates proposed by entities and individuals linked to the Yuxiao fund also failed at the meeting. 

 Hélène Tarin, Editor in Chief of the Asian Bureau, Rough&Polished