Chalmers hits China-linked companies with landmark lawsuit over crucial military minerals
Treasurer Jim Chalmers has launched an unprecedented lawsuit against China-linked interests to force them to sell their stake in an Australian rare earths miner, whose products are crucial to warplanes, missiles and submarines.
The lawsuit, filed in the Federal Court on Thursday against foreign investors in Northern Minerals, is also seeking financial penalties for allegedly refusing to obey Chalmers' direction to sell out of the company last year.
The Australian-listed company is developing the Browns Range heavy rare earths project in remote northern Western Australia, which could be one of the first non-Chinese sources of the minerals used in military guidance systems, wind turbines and electric vehicles.
Chalmers' court action against an entity called Indian Ocean International Shipping and Service Company Ltd and a former associate follows his order last year for five Chinese-linked groups to sell their shares in Northern Minerals to unconnected buyers by September.
'Foreign investors in Australia are required to follow Australian law,' Chalmers said in a statement. 'We are doing what is necessary to protect the national interest and the integrity of our foreign investment framework.'
China's control of rare earths and critical products is an escalating cause of concern to the United States and countries like Australia, after Donald Trump's trade war prompted Beijing to restrict shipments of the materials. It has made similar moves before, including against Japan in 2010 during a territorial dispute.
China controls nearly all of the world's heavy rare earth production and Australian Strategic Policy Institute senior fellow Ian Satchwell said the global superpower's interests were seeking to exert influence over Northern Minerals.
'Australia, with like-minded partner nations, is seeking to build alternative supply chains for rare earths and other critical minerals, and the Northern Minerals shenanigans are a very obvious example of China-linked bad faith investing to allegedly seek to disrupt those efforts,' Satchwell said.
'In Australia's case those rare earths are used for things such as F35 fighters, missiles attached to them and in the future, nuclear-powered submarines.'
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