China accused of foreign interference over remote WA mine

Exclusive: Beijing stands accused of engaging in foreign interference in its bid to control – or stifle – development of a mine in remote WA that promises to break China’s stranglehold on critical minerals crucial to hi-tech defence.

For more than three years, the federal government has been wrestling to rid Chinese investors from Northern Minerals, a Perth-based company that owns a mine at Browns Range in WA’s East Kimberley, near the Northern Territory border.

Brown’s Range is rich in terbium and dysprosium, heavy metal rare earths used in high-temperature magnets, ballistic missiles, nuclear-powered submarines and fighter jets, as well as electric vehicle motors and wind turbines.

China has invested heavily in critical minerals processing over the past 20 years and has a near monopoly on world supply.

Northern Minerals is considered strategically vital as potentially the largest non-China heavy rare earths.

Treasurer Jim Chalmers has twice ordered multiple Chinese companies and individuals to divest their shares in the WA company, citing national security grounds.

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One of the companies instead transferred the shares to its sole director and shareholder, triggering a wider investigation by the Foreign Investment Review Board into Northern Minerals’ share registry.

Robert Monterosso, a research fellow at the United States Studies Centre with an expertise in critical minerals, said the share activity was “certainly foreign interference”.

“These are shadowy Chinese firms that are often not publicly listed that are buying up shares in an Australian company.

“Their purpose is to gain control of the company through equity and influence board decisions.

“Some of these firms do not have Australia’s best interests at heart.

“This is China’s playbook for critical minerals and rare earth dominance. They seek to buy up assets overseas, gain control of those assets, and link them into China’s own supply chains.

“This puts a lot of roadblocks in the way of countries like Australia and the United States to diversify away from China.”

Last October, the Browns Range deposit was earmarked for joint US-Australian funding under a multi-billion-dollar agreement on critical minerals signed by Prime Minister Anthony Albanese and US President Donald Trump.

Former Ambassador to the US Kim Beazley said the West was “starting to fight back” against China’s dominance.

“There is no balance in the markets on a lot of these critical minerals at the moment - they all get processed in China,” Beazley said.

“That’s a bad thing in commercial terms, let alone ultimately in national security terms.”

Beazley said he was concerned by Beijing’s foreign interference and that China should not criticise any other nation using “statecraft” to protect its interests, recommending Australia adopt a hard line in protecting the Browns Range deposit.

“A tough as we need to be to ensure that we control a product, it’s as simple as that,” he said.

Resources Minister Madeleine King said it was vital Australia made the most of its “geological advantage”.

“But equally, it’s good for other countries around the world that see the value in having diverse supply chains of those commodities that have been subject to export restrictions and quite strict export restrictions in the past,” King said.

She declined to comment directly on “any specific cases” but said “the greatest risk is that it prevents these projects being developed”, noting that the Foreign Investment Review Board monitored the sector.

But Monterosso said Beijing’s tactics extended beyond seizing control of companies.

“China’s Plan B here is to effectively scare off US investors, particularly the US government, which has already committed some funding to Northern Minerals.

“So, the objective here is to effectively make the US concerned to put in several hundred million dollars of investment into this project.”

The Chinese government has accused Australia of a pursuing a “desinicisation” of the critical minerals sector.

“Any efforts to suppress China ... are self-damaging and destined to be futile,” the Global Times editorialised.

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“If Australia continues to cling to the old script of ‘relying on the US for security, relying on China for development, while conveniently containing China,’ it will ultimately realise that the times have changed.”

Northern Minerals declined to comment.

Six Chinese investors were given until July 2 to sell a combined stake worth $40 million.