thewest.com.au
Chalmers’ Northern exposure after divestment update
Adrian RausoThe West AustralianMon, 2 September 2024 6:45PMPremiumEmail Adrian Rauso
4 - 5 minutes
Northern Minerals gets new mysterious Chinese shareholders amid Chalmers’ divestment order twist
Treasurer Jim Chalmers’ tough talk against Chinese control of a WA rare earths aspirant will be put to the test after a shareholder failed to comply with a sell-down order.
Singapore-based Yuxiao Fund and four other associates with ties to Chinese conglomerates were ordered by Mr Chalmers on June 3 to offload a chunk of their stakes in Northern Minerals — equivalent to 10.4 per cent of the strategically-important mining company — to “protect our (Australia’s) national interest”.
The 91-day deadline to sell the shares expired today, but not everyone has complied.
“Northern Minerals has been advised that total of 448,537,944 of the shares the subject of the orders have been divested, with 165,035,638 remaining to be divested,” the company told the ASX late on Monday.
“The company understands the holder of the remaining divestment shares is in the process of seeking to dispose their holding.”
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The shareholder was not named.
Mr Chalmers, who made the divestment order acting on advice by the Foreign Investment Review Board, has been contacted for comment.
Yuxiao Fund — once Northern Minerals’ largest shareholder — has completely bailed out of the company.
But two mysterious Hong Kong-based entities are now at the pointy end of the register.
Qogir Trading has 8.45 per cent and Hong Kong Ying Tak holds 8.37 per cent.
“The company is in the process of seeking meetings with both its new significant shareholders,” Northern Minerals said.
Northern Minerals flagged its suspicions about the purchase of the now mostly-divested shares last year and the board requested FIRB investigate. That move was spearheaded by the executive chairman at the time — Nick Curtis.
Yuxiao responded to its FIRB referral by using its 9.8 per cent stake in Northern Minerals to requisition a shareholders meeting to overthrow Mr Curtis and access the company’s books.
Mr Curtis “resigned” a week before the meeting that would decide his fate.
The Monday update extends a tumultuous period for the Perth-based mining hopeful, which is working to establish itself as a key part of the country’s rare earths supply chain through its Browns Range heavy rare earths project in the East Kimberley.
A day after the divestment order a cyber hack infiltration into Northern Minerals’ computer network was revealed and two days later a huge voter turnout prevented Chinese interests seizing control of the Northern Minerals boardroom.
The elections of four Chinese-linked businessmen, who were not endorsed by the existing Northern Minerals board, got voted down at the company’s annual general meeting.
Two of the four proposed appointments were overwhelmingly defeated, but the elections of two others were narrowly avoided.
Northern Minerals is targeting a final investment decision for Browns Range in the March quarter of next year.
The heavy rare earth elements from Browns Range will be used to create the high-tech magnets that enable modern defence equipment, like precision-guided missiles.
Heavy rare earths have a higher atomic weight than their ‘light’ counterparts and are less common. China’s stranglehold on the rare earths market predominately relates to its near total domination of the heavy market segment.
In December China banned the export of heavy rare earths extraction and separation technologies to further tighten control.
Shares in Northern Minerals last traded at 2.5¢, giving the company a market capitalisation of $123 million.
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