Australia requires government approval for Chinese investors selling rare earths holdings

Australia’s Treasurer Jim Chalmers has ordered six China-linked shareholders to dump their combined stake in Northern Minerals Ltd, a rare earths miner sitting on one of the most strategically important deposits outside of China. The directive, issued on national interest grounds, covers roughly 1.68 billion shares, or about 17.58% of the company.

The divestment deadline was set for July 2, 2026. Three of the six entities failed to comply, prompting Chalmers to freeze their voting and shareholder rights by mid-July. This is the third time in as many years that Canberra has intervened to limit Chinese influence over this particular company.

What’s at stake in the ground

Northern Minerals operates the Browns Range project in Western Australia, one of the few significant sources of heavy rare earths outside China. The project produces dysprosium and terbium, two elements essential for permanent magnets used in electric vehicles, wind turbines, and defense systems.

The entities targeted by the divestment order include Hong Kong Ying Tak Limited and Real International Resources Limited, among others. Australia’s Foreign Investment Review Board blocked the same group of shareholders from increasing their stakes in Northern Minerals back in 2023. A year later, in 2024, the government issued its first round of divestment orders, which led to legal challenges from some of the affected parties.

Why this keeps escalating

The repeated non-compliance is what makes this round different. Freezing voting rights effectively strips the affected shareholders of any influence over the company’s direction while they still hold the shares, creating an awkward limbo where they own stock they can’t meaningfully use.

Dysprosium and terbium are particularly critical because they allow permanent magnets to function at the high temperatures found inside EV motors and military equipment. China currently dominates global rare earths production and processing, and has deployed export restrictions, processing bottlenecks, and licensing requirements as leverage in recent years.

The investment landscape shifts

The US Inflation Reduction Act, the EU Critical Raw Materials Act, and various bilateral agreements have created a policy infrastructure designed to channel investment toward non-Chinese supply chains. Australia, with its abundant mineral endowment, sits at the center of that effort.

The frozen voting rights suggest Canberra is not in a conciliatory mood. Three of six entities missed the deadline, and the government responded within weeks, signaling both political will and bureaucratic readiness to enforce compliance.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.