Northern Minerals executive chairman Adam Handley promises to listen to shareholders
Bids to appoint four new Chinese-backed directors to the board of the rare earths miner have been rejected as investors delivered a first strike against remuneration.
Northern Minerals has received a first strike against its remuneration report as motions to appoint four new Chinese-backed directors to the board failed to win enough support from shareholders.
At the ASX-listed’s belated annual meeting in Perth on Thursday, the rare earths miners also told shareholders that it had a duty to adhere to high levels of good governance, including compliance with laws and regulations, after Treasurer Jim Chalmers ordered Chinese-linked investment funds to reduce their holdings in the group.
On Monday Mr Chalmers ordered Yuxiao and its associates — individual investors Ximei Liu and Xi Wang; British Virgin Island-registered Black Stone Resources and United Arab Emirates-based Indian Ocean International Shipping and Service Company — to sell 613.5 million Northern Minerals shares, or about 10.4 per cent of the company.
Shareholders on Thursday voted 37.5 per cent against its remuneration report. A vote of 25 per cent or more against the motion is considered a first strike.
A repeat performance next year, a second strike, will force the board to consider a spill motion.
Shareholder and Yuxiao Fund controller, Chinese businessman Wu Tao, narrowly missed out on a board seat which was not supported by the company amid a rebuff from Mr Chalmers and the FIRB. His vote sat at 49.06 per cent in favour, while three others with links to China’s rare earths industry were rejected by between 70 and 91 per cent of shareholders.
In addition to a board seat, Mr Tao also wanted former CEO Nick Curtis out of the top job which was to be put before a vote to shareholders on Thursday.
That did not go ahead after Northern Minerals announced a board reshuffle last week with chairman Adam Handley now executive chairman, Mr Curits moving into a strategic advisor role and Shane Hartwig promoted from finance director to managing director and CEO. About 43 per cent of shareholders were against his election to the board.
Mr Handley said complaints last year by former boss Mr Curtis of suspicious trading to the FIRB were critical because the company did not fully understand the acquisitions.
“Monday’s divestiture order by the Federal Treasurer was the outcome. Northern Minerals was not – nor should it have been – involved in determining – nor consulted on – the outcome,” he said.
“Our duty was to raise these reasonable questions we were unable to answer ourselves with the relevant authority. From our perspective, the board is satisfied that the FIRB process is now complete.
Mr Handley also acknowledged there had been unrest among some sections of Northern Minerals’ shareholder base for myriad reasons, including frustration at the pace of development of Browns Range as well as some differences of opinion.
“One of the outcomes of this unrest has been the nomination by several Shareholders of their own nominee to the board of Northern Minerals,” he said.
“We have begun a process of considering what further skills and characteristics might complement the current board to help us drive positive outcomes for all shareholders.”
Mr Handley said he respected the outcome and the diverse views held by shareholders.
“As a Board, we are committed to listening to all Shareholders and respecting their opinions. We are also committed to moving forward in earnest to focus on Browns Range,” he said.
Control of Northern Minerals has been the subject of controversy for months, with tensions rising among Chinese-backed shareholders after the rare earth explorer cut a deal with ASX-listed Iluka Resources for the sale of rare earth minerals from its Browns Range project in Western Australia.
Northern Minerals on Tuesday said it had become aware of data theft from its systems in late March. The stolen data includes “corporate, operational and financial information and some details relating to current and former personnel and some shareholder information”, the company said.
Mr Handley said the group had offered support to those who have had their data breached and had moved to strengthen protection around its systems.
“As is typical with cyber security attacks on corporations like Northern Minerals, the hackers demanded a ransom from us. Northern Minerals — out of principle — refused to engage with the hackers on a ransom,” he said.
“The fact we disclosed the cyber security breach a day after the Treasurer’s divestiture order was announced is a coincidence.”
The breach is being investigated by Australian authorities and it remains unclear if the hackers are backed by state interests or are cyber criminals motivated solely by financial interests.
Northern Minerals has significant deposits of heavy rare earths in Western Australia, particularly the high value element dysprosium — a rare element used in wind turbines, electric vehicles and control rods for nuclear reactors due to its ability to resist demagnetisation at high temperatures.
Shares rose more than 7 per cent to 4.5c on Thursday.
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