Australia Blocks Chinese-Linked Company’s Rare Earths Deal, Sparking Criticism From Beijing

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China’s Foreign Ministry has accused Australia of “politicising economic and trade issues” and “violating the principle of market competition” in response to Australia’s decision to block the rare earths deal. The ministry also called on Australia to “create a fair and non-discriminatory business environment” for Chinese companies operating in the country.

A Chinese-linked company’s attempt to increase its ownership in a rare earths supplier has been blocked by Australia, prompting criticism from Beijing and highlighting the challenges facing the two nations in improving their relationship. 

“We hope that Australia can provide a fair and non-discriminatory environment for Chinese enterprises to operate in Australia,” Foreign Ministry spokesman Mao Ning said on Friday at a regular press briefing in Beijing.

“We will resolutely safeguard the legitimate rights and interests of Chinese enterprises investing and operating abroad,” she added, without specifying any measures.

The bid by Singapore-based Yuxiao Fund to raise its stake in Northern Minerals was stopped by Australian Treasurer Jim Chalmers based on advice from the Foreign Investment Review Board. 

“All investment decisions are made in Australia’s interests and within the regulatory framework,” a spokesman for Australia’s Department of Foreign Affairs said in a statement to Reuters on Friday.

China protested the move, but Australia said its foreign investment decisions are made in the national interest. Relations between the two countries have been improving, but investment remains contentious. 

The rare earths industry is crucial for many high-tech products, including smartphones, electric vehicles, and military hardware. Northern Minerals aims to become the first significant world producer of dysprosium, a key component for electric vehicle magnets, outside China, which controls 94% of the supply.

The Australian government has previously expressed concerns about the potential for China to monopolise the rare earths industry and has taken steps to encourage the development of domestic supply chains. The government has also recently announced plans to invest in critical minerals processing facilities to reduce reliance on Chinese supply.

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