A fierce battle unfolded between Northern Minerals, an Australian mining company, and Chinese investors over control of critical rare earths. The dispute highlights the escalating global competition for rare-earth minerals amid geopolitical tensions.

The Battle Begins

Last year, Northern Minerals needed to raise $16 million. Problems arose when it was discovered that Wu Tao, a major Chinese investor blocked from increasing his stake due to national security concerns, might have bypassed the restrictions using proxies. This led to an investigation by the Australian government.

Government Intervention

In June, Australian Treasurer Jim Chalmers ordered Wu Tao's company, Yuxiao Fund, and other related investors to divest $15.5 million worth of shares by early September. Wu Tao has remained silent about the ruling.

The Global Stakes

Australia’s rare earths exports are crucial, especially as countries like the U.S. seek to reduce dependence on China, which dominates the industry. The construction of a major refinery in Western Australia, supported by an $800 million Australian government loan, aims to secure alternative supply chains.

China's Dominance

China’s control over rare earths includes mining, processing, and pricing, often making it difficult for other nations to compete. This monopoly extends to influencing global supply through misinformation campaigns and maintaining low prices to stifle competition.

Suspect Transactions

Northern Minerals' investigation revealed suspicious share purchases linked to Wu Tao and his associates, indicating potential proxy control. The investigation and subsequent governance issues delayed the company's annual general meeting and saw Wu Tao narrowly miss a board position.

Ongoing Developments

The regulatory investigation revealed gaps that could have allowed Wu Tao and his proxies to gain significant control. As of late July, the divestment order remains unfulfilled, with Yuxiao Fund and related shareholders still under scrutiny.

This case underscores the intense global rivalry for rare-earth resources and the strategic importance of controlling these critical materials.