A strategically important deposit of rare earths in Australia is the prize in a legal brawl which erupted earlier today when the Australian Government launched its first case for alleged breaching of foreign investment laws against a group of shadowy Chinese investors.
Australia’s Treasurer (Finance Minister) Jim Chalmers said the action was being taken against Indian Ocean International Shipping and Service Company for failing to comply with an order to sell shares in a rare earth project developer, Northern Minerals.
Australian Treasurer Jim Chalmers. (Photo by Martin Ollman/Getty Images)
Indian Ocean and five associated foreign investors were ordered last year to sell the shares they had acquired in Northern which owns the Browns Range rare earth project in the far north of Western Australia.
Browns Range is rich in dysprosium and terbium two of the most valuable rare earths with specialist uses in industrial and defence equipment. China dominates current supply.
Both dysprosium and terbium were on a list of materials which China temporarily banned from export to the U.S. earlier this year.
Terbium was also recently added to the inventory of products produced by Australia’s Lynas Rare Earths which is working closely with the U.S. Government on rare earth refining.
The Northern Minerals project at Browns Range is reported to contain the biggest deposit of dysprosium and terbium outside China.
Military Uses
The company, in a background note, said dysprosium and terbium were used in the production of magnets for military, clean energy, and high technology industries.
“Dysprosium and terbium are prized because their unique properties improve the durability of magnets by increasing their resistance to demagnetization, Northern Minerals said.
“The flagship deposit in Browns Range is Wolverine which is thought to be the highest-grade dysprosium and terbium orebody in Australia.
Periodic symbol and diagram of Dysprosium illustration
“The company is preparing to bring Wolverine into production with the objective of providing a reliable alternative source of dysprosium and terbium to production sourced from China.”
Chalmers said in a statement that he was doing what was “necessary to protect the national interest and Australia’s foreign investment framework”.
He did not name any individuals in the compulsory share sale (disposal) order but last year there were five groups of investors said to have been ordered to sell their Northern Minerals shares including a business called Yuxiao and individuals named as Ximei Liu and Xi Wang.
The Australian Financial Review newspaper said Yuxiao is close to China-based Shenghe Resources and China Northern.
Ordered To Sell
Today’s case against the Chinese investors is said to focus on the fact that they have defied the original order to sell stock as required by Australian law.
Browns Range is being developed in association with a rare earth refinery being built in the south of Western Australia by Lynas Rare Earths.
Northern Minerals told the Australian Stock Exchange that it was not party to the government action against the Chinese investors.
