Australia's resources minister says nationalising Perth-based Northern Minerals is "one option" after China-linked investors failed to sell shares they were ordered to divest, holding up a key heavy rare earths project.
At a glance
- Six investors holding about 17% were ordered in May to sell by July 2, but most still hold their shares.
- Northern Minerals is developing the Browns Range dysprosium and terbium project in Western Australia.
- The company is on track for about $500 million in funding from the Export-Import Bank of the United States.
Background
Dysprosium and terbium are heavy rare earths used in high-performance magnets for renewable energy and military technology. China dominates their supply. In Australia, the Treasurer can order foreign investors to sell stakes on national interest grounds, on advice from the Foreign Investment Review Board (FIRB).
What happened
Resources Minister Madeleine King told the National Press Club on Wednesday that nationalising Northern Minerals was "one option" for the government, the ABC reported. She stressed that no decision had been made.
In May, Treasurer Jim Chalmers ordered six investors holding around 17% of the company to divest by July 2. Northern Minerals told the ASX in July that they still held most of the shares, and King appeared to confirm they had not paid fines imposed for non-compliance.
Why the government is stepping up
King said the uncertainty was holding up Browns Range, in Western Australia's east Kimberley region. The project is seen as vital to developing sources of dysprosium and terbium outside China.
The government has intervened repeatedly. Chalmers blocked China-linked Yuxiao Fund from raising its stake in 2023 and ordered five more China-linked companies to divest in 2025. FIRB later found that three blocked investors had transferred their shares to Hong Kong Ying Tak Ltd, one of the six ordered to sell this year.
What it means
Northern Minerals is a key part of US and Australian efforts to build a rare earths supply chain outside China. It is on track for about $500 million in US Export-Import Bank funding. A drawn-out standoff with its shareholders could slow that work.
King said the case showed why the government must finish its review of foreign investment laws, which is due to wrap up next year. The ABC said it had approached Northern Minerals for comment.
Our read
Outlook: neutral. The dispute affects when new non-Chinese dysprosium supply arrives, not current prices, which are driven by China.
What to watch
- Whether the government takes further action against the investors who have not sold.
- Progress on US Export-Import Bank funding for Browns Range.
- The outcome of Australia's foreign investment law review next year.
For information only, not investment advice.
Detailed analysis
Timeline
- 2026-07-02: Deadline for six China-linked investors to divest passes with most shares still held.
- 2026-10-14: Resources Minister Madeleine King says nationalisation is one option.
Government Policies
Australia has ordered China-linked investors to divest and is now considering nationalisation as an option.
Geopolitical Risks
The US and Australia want heavy rare earth supply outside China's control.
What could lift prices
- Government backing increases the chance Browns Range gets built.
- US Export-Import Bank funding of about $500 million is on track.
What could weigh on prices
- The shareholder standoff is delaying the project.
- Nationalisation would be a rare and uncertain step.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Australia | High | Its government is weighing nationalising a strategic rare earths miner. |
| China | Medium | China-linked investors are defying divestment orders. |
| United States | Medium | Its Export-Import Bank plans to fund the project. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Critical Minerals Mining | Negative | The dispute is delaying a key heavy rare earths project. |
Who gains, who loses
- Rare earth users outside China: A secured Browns Range could add alternative supply.
- Northern Minerals shareholders: Uncertainty and possible state intervention cloud the company's outlook.
Other ways this could play out
- If the investors sell, Browns Range could move ahead with US funding.
- If they keep defying orders, the government could take stronger steps, including nationalisation.
Price risks
- Legal challenges could delay any government action.
- Chinese supply and pricing decisions still dominate the heavy rare earths market.
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China
United States