29 March, 2024
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Treasurer defends blocking Chinese minerals investment

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The treasurer has defended a decision to block a Chinese-backed company from increasing its share in a producer of heavy rare-earth minerals.

Yuxiao Fund sought to increase its ownership in Northern Minerals from 9.9 per cent to 19.9 per cent but was blocked after Treasurer Jim Chalmers signed a prevention order in February.

Dr Chalmers said he made the decision based on the advice of the Foreign Investment Review Board.

“It’s consistent with other decisions taken by other governments in the past,” he told reporters in Canberra on Wednesday.

“Beyond that, I don’t intend to comment.”

Northern Minerals owns the Browns Range mine in northern Western Australia, which the company hopes to turn into the first significant producer of dysprosium – used in control rods in nuclear reactors, magnets and other industrial applications – outside China.

Opposition Leader Peter Dutton said foreign investment needed to be in the national interest.

“The treasurer at the time, Josh Frydenberg, made decisions in relation to a number of projects that didn’t proceed,” Mr Dutton said.

“That was based on advice from (security) agencies, from treasury (and) defence.

“Governments do have to make tough decisions and act in our country’s best interests and we’ll support the government where they do that.”

The foreign investment board assesses the risk of foreign investment to national security.

“Foreign investment carries risks related to the potential access and control investors may obtain over organisations and assets,” the board’s guidance note says.

“When used as a vector for malign activities, foreign investment can harm national security.”

Prime Minister Anthony Albanese flagged keeping more critical minerals, like the lithium used in battery production, onshore to not only boost the domestic manufacturing sector but also safeguard Australia’s national interests.

“I want to make sure we use the lithium and nickel and other products that we have to make batteries here,” he said last week.

“That’s part of the vision of protecting our national economy going forward. We should be making so many more things here in order to protect our national sovereignty.”

The Singapore-registered Yuxiao Fund is an investment vehicle of Chinese national Yuxiao Wu, who also has interests in Mozambique mines that supplies lower-grade rare earths to China, Northern Minerals executive chairman Nick Curtis told Reuters.

Mr Curtis said Mr Wu invested in Northern Minerals for financial reasons as opposed to simply supplying China with rare earths.

– AAP

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