Australia Orders Sale of Northern Minerals: What This Means for China’s Rare Earth Investments

[The Guru=Reporter Jeong Deung-yong] Australia has ordered Chinese investors to divest their stakes in a heavy-rare-earths company on national-security grounds, a move designed in part to curb Beijing’s dominance of the rare-earth supply chain.

On May 18 (local time), Australia’s Treasury announced it had directed Chinese investors in heavy-rare-earths developer Northern Minerals to sell their holdings.

The order requires five companies based in China and Hong Kong and one firm registered in the British Virgin Islands to sell their shares in Northern Minerals within two weeks. Bloomberg data show those six entities together hold roughly 27% of the company.

Canberra issued a similar order in 2024, instructing five China- and Hong Kong-linked firms to divest and ordering some investors to dispose of assets. When those firms did not comply, the government sued and won a judgment last year.

Northern Minerals said it is reviewing the Treasury’s order and will notify the market of any developments.

China’s Foreign Ministry said it was not aware of the case but urged Australia to respect the legal rights of foreign investors.

Chinese direct investment in Australia surged unusually last year, prompting tighter scrutiny of investments in critical minerals that underpin the defense industrial base and the transition to clean energy.

Northern Minerals is one of Australia’s leading developers of heavy rare earths, producing dysprosium and terbium. Those elements are essential for high-performance permanent magnets used in electric-vehicle motors and wind turbines, and they are critical inputs for advanced military systems such as fighter jets and missile radars.

Notably, Northern Minerals’ Browns Range project is one of the few large heavy-rare-earth deposits outside China. Though it has not yet entered large-scale commercial production, the site’s strategic importance is reflected in letters of intent from both the U.S. and Australian governments to explore future cooperation.