Australia tightens grip on Northern Minerals in rare earths crackdown
Synopsis
Northern Minerals is under new pressure for its to-be-sold stakes as governments tighten the screw on foreign investment in rare earths projects. It follows a series of similar moves aimed at ensuring the security of supply for critical minerals, whose importance has been rising as governments seek alternative sources for rare earth materials employed in defence, electric vehicles and technology production.
Northern Minerals is now subject to fresh orders from its shareholders to divest due to growing investor concerns about foreign investment and rare earth supply chains in the critical minerals industry all over the world.
Key Highlights
- Australia has instructed 6 members of its Northern Minerals shareholding team to sell their holdings because of national interest issues.
- Northern Minerals' Browns Range heavy rare earths project in Western Australia.
- International Energy Agency estimates put the world's processing capacity of rare earths under the control of China.
- The Browns Range project will need approximately A$600 million to move forward with development.
Treasurer Jim Chalmers has issued an order to six shareholders to sell their stake in Northern Minerals, the company behind China's new growth strategy for rare earths, again after claiming he was acting on Australia's national interest.
The new orders follow previous action against investors in China-based Northern Minerals, which is advancing the Browns Range (Western Australia) heavy rare earths project. The project also includes dysprosium and terbium, which are used in electric vehicles, wind turbines, semiconductors and defence equipment.
The news follows ongoing efforts by governments and manufacturers to gain control over non-Chinese supply chains for critical minerals as a result of export curbs and trade tensions with China.
Rare earths is on the prowl again
Since 2023, Northern Minerals has been under regulatory attention as it directed shareholder activity to the Foreign Investment Review Board (FIRB) for consideration.
In 2024, the authorities called on several investors from China to sell off a total of 10.4% of their stake in the company. Earlier this year, Hong Kong investor Ying Tak also was barred from voting and trading most of its shares during investigations.
The International Energy Agency (IEA) recently reported that China holds approximately 70% of the world's rare earth mining capacity and nearly 90% of the processing capacity. The concentration has put pressure on countries looking for alternative supply channels.
Browns Range and Critical Minerals Push
Northern Minerals' Browns Range project is one of the few other important heavy rare earth (HRE) projects outside China. High temperature magnets for electric motors and defence systems utilise heavy rare earths.
The company estimates the project will need to be developed for approximately A$600 million.
The new Northern Minerals contracts come at a time when governments are increasing funding for critical minerals processing domestically. Across a range of allied projects, official announcements and Reuters reporting earlier this year revealed support packages worth more than A$5 billion have been tied to rare earths and battery mineral projects.
Northern Minerals continues to be a pre-production miner with a project development and financing emphasis. The latest market filings reveal the company's annual revenue of approximately A$1.5 million, and a net loss of near A$28 million.
In recent months, investors have been more focused on rare earths producers outside of China, following Beijing's move to tighten regulations on exports of several strategic minerals that play a vital role in technology and defence industry applications.
FAQs
Q1. What is the government's reason for coming under the microscope over Northern Minerals?
Foreign linked stock holdings of Northern Minerals are under scrutiny because of national interest concerns regarding critical minerals assets.
Q2. Why is Browns Range Project so significant?
Heavy rare earth elements for electric vehicles, wind turbines, semiconductors and defence technology are part of the project.
Q3. What makes supply chains for rare earths so special and so significant that they are attracting global attention?
China holds world leadership in both rare earth mining and processing and countries are looking to find alternative sources.
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Pooja Malik is a business journalist with over six years of experience covering startups, entrepreneurship, and emerging trends. She has previously worked with leading media platforms such as YourStory Media and BW BusinessWorld, where she reported on business, policy, and market developments. Currently, she serves as Editor at The Inspirepreneur Magazine, where she writes and edits stories across business, lifestyle, and travel, with a focus on clarity, accuracy, and reader relevance.
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