Australia has launched its first-ever lawsuit under the Foreign Acquisitions and Takeovers Act, targeting China-linked investors in a critical rare earths project.
In a case announced on June 26, Treasurer Jim Chalmers revealed that the government is suing Indian Ocean International Shipping and Service Company and a former associate for failing to comply with an order to divest shares in rare earths miner Northern Minerals (NTU.AX)—a Western Australian miner developing the Browns Range heavy rare earths deposit.
The action follows a June 2024 directive from the Treasurer, based on Foreign Investment Review Board advice, requiring five foreign entities with ties to China to offload a combined 10.4 per cent stake in Northern Minerals. That order was issued on national interest grounds, aimed at safeguarding Australia’s supply of critical minerals essential for electric vehicles, renewable energy technologies, and defence applications.
Northern Minerals, listed on the ASX as NTU, operates the Browns Range project in the Kimberley region, one of the world’s few significant sources of dysprosium and terbium outside China. These elements are vital in high-strength magnets used in everything from wind turbines to guided missiles.
The failed divestment by the named investors prompted the government to move from administrative sanction to litigation—the first time Australia has resorted to the courts to enforce foreign investment rules in its resource sector.
The lawsuit, filed in the Federal Court, marks a tougher stance on compliance. Treasurer Chalmers stated that Australia “operates a robust and non-discriminatory foreign investment framework, and will take further action if required to protect our national interest.” Legal experts note that this case could set a precedent for enforcing divestment orders and deter future breaches by foreign stakeholders in strategically important industries.
For Melbourne, where many work in professional services linked to the resources sector, the case underscores rising scrutiny of overseas investment. Industry stakeholders in Victoria, home to several critical minerals consultancies and downstream manufacturers, are watching closely as the government tests its powers to ensure foreign capital aligns with Australia’s long-term security and economic objectives.
Support our Journalism
No-nonsense journalism. No paywalls. Whether you’re in Australia, the UK, Canada, the USA, or India, you can support The Australia Today by taking a paid subscription via Patreon or donating via PayPal — and help keep honest, fearless journalism alive.
