A Chinese mining investor has failed in a bid to join Australian rare earths mining company Northern Minerals' (NTU.AX) board on Thursday, days after Australia's Treasurer ordered the investor's private company to sell some of its shares.
Treasurer Jim Chalmers earlier this week ordered several China-linked investors to dispose of Northern Mineral shares, amounting to 10.4% of its issued share capital, on national interest grounds.
Yuxiao Fund had 60 days to offload 80 million Northern Minerals shares bought in September. The company was ordered not to lift its stake in February 2023.
Australia and its Western allies are striving to build out a supply chain separate to dominant producer China, which supplies around 90% of the world's permanent magnets used in everything from wind turbines to electric vehicles to defence.
Rare earths miners are increasingly relying on government support. Northern Minerals is producer of heavy rare earths, which are more sought after by China. It shares closed up 7%.
The fund had sought Foreign Investment Review Board approval to raise its ownership to 19.9% in 2022, from 9.81% of Northern Minerals, but was declined last year.
Northern Minerals has said the ultimate controller of Yuxiao Fund is Chinese national Wu Tao. Wu's nomination to join the Northern Minerals board was one of four that failed on Thursday, the company announced at its annual meeting.
Wu Tao has mining interests in Mozambique and China, where his private company has developed and operated rare earth minerals businesses, Northern Minerals has said.
Two other board candidates proposed by entities and individuals linked to Yuxiao Fund and named in the Treasurer's disposal order on Monday also failed at the meeting.
The Australian government's order to several China-linked investors to dispose of shares was not connected with the company's revelation this week of a data leak by cyberhackers, Northern Minerals Executive Chairman Adam Handley said at the meeting.
Northern Minerals said on Tuesday some of its corporate, operational and financial data had been released on the dark web, following a cyberattack in March.
Handley said at the company's shareholder meeting in Perth on Thursday that the attack and the divestiture order were not linked.
"As is typical with cyber security attacks on corporations like Northern Minerals, the hackers demanded a ransom from us. Northern Minerals, out of principle, refused to engage with the hackers on a ransom," he said.
"The fact we disclosed the cyber security breach a day after the Treasurer's divestiture order was announced is a coincidence. There are no suggestions, contrary to some media speculation, that the two events are linked in any way."
