WA rare earths mine overlooked for funding while it cannot unmask shareholders
Government sources said ‘unresolved identities’ on the Northern Minerals register remained a barrier to the company securing funding.
Treasurer Jim Chalmers faces the prospect of having to intervene for a third time in the affairs of Northern Minerals, which is trying to secure taxpayer funding for its Browns Range heavy rare earths project but cannot clarify the sovereignty of foreign interests on its share register.
Government sources said unresolved identities on the Northern Minerals register remained a barrier to the company securing funding from the Northern Australia Infrastructure Facility and Export Finance Australia.
An assessment by the Foreign Investment Review Board, which answers to Treasury, is ongoing.
The federal government has splashed out about $3bn in support for rare earths projects since 2022, as allies including US president Donald Trump ratchet up efforts to secure rare earths supply for defence and other key industries. But Northern Minerals remains out in the cold.
Northern Minerals’ Browns Range project is slated to supply Iluka Resources with heavy rare earths for Australia’s first fully integrated refinery being built at Eneabba in Western Australia with $1.65bn in taxpayer support.
The stock is trading at a near five-year low of 1.7c, with Northern Minerals last month raising about $41.5m in a placement.
The company has not updated the market on its engagement with major shareholders since events at its annual general meeting last November when a mystery Chinese businessman came close securing a seat on the board.
The company was separately unable to contact a Hong Kong-registered entity that became a major shareholder in the wake of a previous divestment order issued by Treasury.
Northern Minerals managing director Shane Hartwig and executive chairman Adam Handley declined to speak to The Australian or respond to a series of questions about whether it had been able to shed any more light on businessman Enping Fu or Hong Kong-registered companies Qogir Trading & Service and Hong Kong Ying Tak, which each control about 8.4 per cent of Northern Minerals.
The two executives, who attended the PDAC mining conference in Toronto last week, also declined to comment on whether a lack of clarity around Chinese investors was hurting efforts to advance Browns Range as a source of the heavy rare earths dysprosium and terbium, which are essential for modern weapons systems.
Dr Chalmers was asked about compliance with previous share sale orders and if Treasury was continuing its “full assessment” around Northern Minerals.
“Treasury is consistently monitoring and assessing compliance with the foreign investment framework,” a spokesman said.
“The government has a strong track record of using our foreign investment powers when necessary, and we won’t hesitate to protect the national interest if we need to.”
Five China-linked entities were ordered to divest shares in Northern Minerals last year. Information stolen from the company in a cyber attack was published on the dark web within 24 hours of the order.
Singapore-registered Yuxiao Fund sold its stake to Qogir Trading & Service and Hong Kong Ying Tak, and later took out a full-page advertisement in The Australian to declare it had fully withdrawn from the Australian investment market but remained positive about Chinese-Australian co-operation in critical minerals.
Treasury’s first intervention was to prevent Yuxiao Fund boosting its stake in Northern Minerals to 19.9 per cent.
Northern Minerals’ former executive chairman, Nick Curtis, helped break China’s stranglehold on rare earths processing during his time in charge of Lynas Rare Earths. He raised the alarm about suspicious share trading in Northern Minerals in 2023 and requested an FIRB investigation.
Mr Curtis resigned as executive chairman last May with Mr Handley, a former president of the Australia China Business Council and who is currently convener of the Premier’s China WA Strategic Resources Dialogue, succeeding him.
Speaking at a delayed AGM last June, Mr Handley said the divestment order did not relate to foreign ownership of the company’s shares but to “the queries which we were unable to answer in relation to transparency of share ownership”.
“One of the board’s roles is to ensure the company adheres to high levels of good governance including compliance with the laws and regulations relating to Australian companies and companies listed on the ASX. We take these duties seriously. That includes necessary transparency with regard to the ownership of shares of the company,” he said.
Mr Handley did not attend the subsequent AGM in November, offering his apologies after suffering what was described as an accident at home that morning.
Mr Trump has been vocal about securing rare earths supply from Greenland and Ukraine since his return to the White House.
In a speech to congress last week, he said: “I will also take historic action to dramatically expand production of critical minerals and rare earths here in the USA.”
The comments sent the share price of the Gina Rinehart-backed MP Materials soaring. Australia’s richest person has an 8.5 per cent stake in New York-listed MP Materials, the leading US producer of rare earths.
Mrs Rinehart also owns an 8.2 per cent stake in Lynas, which early last year confirmed it had been in merger talks with MP Materials that did not result in a deal.
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