China’s mineral raider reveals ties with Communist Party

The Chinese businessman being investigated over a suspected ­covert takeover attempt of a key Australian critical minerals operation has revealed he has ‘strong support’ from the Chinese Communist Party.

Chinese businessman Wu Tao, the founder of Yuxiao Group.

The Chinese businessman being investigated over a suspected ­covert takeover attempt of a key Australian critical minerals operation has revealed he has “strong support” from the Chinese Communist Party for his overseas business ventures.

Wu Tao, the chairman of Yuxiao Group, has not yet replied to The Australian’s request for comment about his latest run-in with Canberra’s foreign investment regulator over his involvement with the ASX-listed company Northern Minerals.

But in an extensive interview in September with the China Business Times, Mr Wu offered a wealth of information for the Foreign Investment Review Board to consider as it probes his suspected investment activity in the West Australian firm.

“We have strong support from the country and the government behind us,” Mr Wu told the China Business Times.

“Especially when my country’s economic and social development faces resource constraints, Yuxiao Group has the responsibility to strengthen (China’s) mineral resource reserves,” he added.

Chinese President Xi Jinping’s top advisers have signalled he will press Anthony Albanese over Australia’s treatment of Chinese investment when they meet in Beijing early next week.

Beijing has complained for years about Canberra’s souring on Chinese investment.

In the decade before Mr Xi came to power, Australia was one of the top destinations for Chinese overseas investment.

Despite Beijing’s claims of unfair treatment, only America has a higher total stock of Chinese investment than Australia, according to data compiled by the American Enterprise Institute.

In his interview with the China Business Times, Mr Wu perhaps inadvertently confirmed some of the reasons for Canberra’s heightened concerns about Chinese investment in the Xi era, particularly in strategically important resources.

“The development of enterprises today is entirely due to the policy support of the party and the state,” he said, adding: “We must actively fulfil the responsibilities entrusted to us by the state, assume corresponding obligations, and must not ‘forget our roots’.”

The conflation of the private and public sector in Mr Xi’s China has led FIRB to treat all Chinese investment as government linked, an approach Beijing claims is ­discriminatory.

China’s epic trade coercion campaign after the Australian government called for an independent inquiry into Covid raised Canberra’s concerns still further.

All investment from China is now considered by FIRB for its potential to be used in future coercive campaigns.

Multiple sources familiar with the regulator said Mr Xi would likely be disappointed by the answers he hears next week from the Prime Minister on Chinese investment. “You can’t put the genie back in the bottle,” said a source familiar with FIRB’s thinking. “The warming of relations doesn’t change the risk assessment.”

Jim Chalmers earlier this year blocked, on FIRB advice, an attempt by Mr Wu to double his 10 per cent stake in Northern Minerals. The WA company has some of the world’s largest reserves of critical minerals that are essential for cutting-edge military, medical and electric vehicle technology.

America and Australia are working closely together on the development of critical minerals development to try to reduce international dependence on Chinese production.

During his visit to Washington last week, Mr Albanese announced a $2bn expansion of the government’s critical minerals facility to “turbocharge” development of the industry in Australia.

In recent days, the board of Northern Minerals referred to FIRB what it suspected was an ­attempt by Mr Wu to secretly seize control of the ­company through associated Chinese entities.

The potential takeover would have had implications for the ­federal government’s ambition to underwrite processing of critical minerals in competition with China.