Australia Blocks China-Linked Company Austroid’s Takeover of Alita Resources

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In a move aimed at safeguarding national interests, Australia has intervened to prevent the China-linked company Austroid Corporation from taking over the financially troubled lithium miner Alita Resources. 

Issued by Chalmers, the prohibition effectively stops Austroid Corporation from acquiring an additional 90.10 percent of Alita Resources, which would have given them full ownership. The ban also extends to Austroid Australia, the US-based Austroid’s local subsidiary, from wholly acquiring Alita. This decision comes as a blow to Austroid’s plans to convert debt to equity through the takeover.

“The Treasurer has issued a prohibition order consistent with advice from the Foreign Investment Review Board,” Chalmer’s spokesperson said.

Public records show that the director of Austroid Australia is a Chinese national with extensive experience in the Chinese mining industry. This raised concerns about potential implications for Australia’s critical minerals industry and national security.

Alita Resources has been under administration since 2019, and Austroid’s proposal to take over the company offered a glimmer of hope for its financial recovery. The shock and disappointment expressed by Austroid Corporation indicate the significance of the blocked takeover, with uncertainties arising around the operation of the Bald Hill lithium mine, which exports to China.

In a speech last year, Chalmers had already hinted at Australia’s increasing selectivity regarding investments in its critical minerals industry.

China has criticised Australia’s tendency to block Chinese investments on national security grounds. Nevertheless, Australia’s move underscores the country’s cautious approach to foreign investments, especially regarding industries with strategic significance.

“Austroid is shocked and disappointed by this decision,” Austroid stated. “We are at a complete loss to understand the reasons for this decision, given our full cooperation and detailed responses to any questions asked by FIRB during this process,” it added.

As the situation unfolds, stakeholders will closely watch how Alita Resources’ future pans out and how both countries navigate their bilateral economic ties.

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