Rare earths company could be nationalised as China-linked investors fail to divest

The Resources Minister Madeleine King says nationalising a Perth-based heavy rare earths company is an "option" for the government as China-linked investors continue to defy orders to divest from the strategically sensitive miner.

In May, federal Treasurer Jim Chalmers ordered six investors which hold around 17 per cent of Northern Minerals to divest by July 2 from the company, which is developing the Browns Range project in Western Australia's east Kimberley region.

But Northern Minerals told the ASX later in July that the companies still held most of the shares they had been ordered to sell.

Northern Minerals is seen as a key player in efforts by both the US and Australia to break China's stranglehold on the critical minerals supply chain and is already on track for about $500 million in funding from the Export Import Bank of the United States.

Madeleine King told the National Press Club on Wednesday that the uncertainty was "holding up" the development of the project, which is vital to developing alternative sources of dysprosium and terbium, critical minerals which are used in both renewable energy infrastructure and advanced military technology.

"It is one of the most significant heavy rare earth deposits on the face of the Earth, so it means a lot to us and our national interest and national security,"

she said.

The minister also appeared to leave the door open to nationalisation when asked if the government would be willing to take that step — although she stressed that no decisions had yet been made.

"I guess it is one option, but I wouldn't want to advance on any decision we're making there," she said.

She also appeared to confirm that the companies had failed to pay the fines imposed by the federal government for non-compliance.

Ms King said the government was "very active knowing what is going on" when it came to the project, and took aim at the China-linked investors refusing to sell, saying "failure to follow through or pay respects, quite frankly, to Australian government decisions, is a very serious matter we are looking at". 

"There have been a number of decisions made by FIRB [the Foreign Investment Review Board] but also divestment decisions as well, and that has not been done by those who hold those shares," she said.

"That's not good."

The comments from the minister come after a rolling series of government interventions designed at protecting the company from Chinese entities stalking it.

In 2023, Mr Chalmers blocked a Chinese-linked investor Yuxiao Fund from boosting its stake in the company, and in 2025 he ordered another five companies linked to China to divest from it.

One of those Chinese investors launched an unsuccessful bid earlier this year to topple the company's leadership.

And at least some of the Chinese companies blocked from Northern Minerals seem to have made multiple efforts to circumvent federal government orders to divest from the company.

Earlier this year the Foreign Investment Review Board wrote to Northern Minerals, saying three of the blocked investors last year had simply transferred their shares to Hong Kong Ying Tak Ltd, one of the six companies ordered to divest earlier this year.

The Resources Minister said the saga highlighted the need for the federal government to press on with its review of foreign investment laws, which is due to wrap up next year.