Australia considers nationalising critical minerals company to ward off Chinese influence

The federal government is not ruling out nationalising a critical minerals company to counter China’s persistent attempts to stifle the development of the “most significant heavy rare earth deposit on the face of the earth”.

Resources Minister Madeleine King on Wednesday confirmed reports by 9News in July that Chinese investors have been trying to buy stakes in Perth-based company Northern Minerals.

The company owns a mine at Browns Range in WA’s East Kimberley, an area rich in heavy metal rare earths used in ballistic missiles, nuclear-powered submarines and fighter jets, which threatens to break China’s stranglehold on critical minerals.

Labor has had to twice order six Chinese investors to divest their shares in the company over national security grounds and gave them until July 2 to sell the combined $40 million stake.

King said they have failed to do so, creating a “significant challenge” for Australia.

“It is a very serious matter, the situation with Northern Minerals and the Browns Range deposit in north-western Australia,” she told reporters at the National Press Club.

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“It is one of the most significant heavy rare earth deposits on the face of the earth, so it means a lot to us and our national interest and national security.”

King said the government is looking to strengthen the Foreign Investment Review Board, which is the body tasked with examining and providing government advice on proposed investments in Australia, to address failures to comply with orders to divest.

Asked by 9News whether the government may be considering nationalising Northern Minerals, the minister responded: “It is one option, but I wouldn’t want to advance on any decision that we’re making there.”

Northern Minerals was publicly listed in 2006 and is considered strategically vital as potentially producing the largest non-Chinese heavy metal rare earths.

Its Browns Range project is the most advance heavy metal rare earths project in the world and produces vital terbium and dysprosium, which are used for hi-tech defence equipment.

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

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The federal government has been wrestling Chinese investors from Northern Minerals for more than three years.

In one case of a Chinese company told to divest, it instead transferred the shares to its sole director and shareholder and triggered a wider investigation by the Foreign Investment Review Board.