Australia could take the extraordinary step of nationalising a strategically important rare earths company as the Federal Government attempts to prevent China-linked investors from retaining influence over a critical minerals asset.
Northern Minerals is developing the Browns Range project in Western Australia, which contains dysprosium and terbium, two rare earth elements considered strategically important for defence, renewable energy and advanced manufacturing.
The Federal Government previously ordered several China-linked investors to sell their holdings in the company because of national security concerns.
Some investors have yet to comply with those orders.
Resources Minister Madeleine King has now said nationalisation remains one possible option if the ownership dispute cannot be resolved.
China dominates heavy rare earths
The stakes are unusually high because China controls the overwhelming majority of the world’s processing capacity for heavy rare earths.
Dysprosium and terbium are used to improve permanent magnets so they can operate at high temperatures, making them important in electric vehicles, wind turbines, robotics and military systems.
Australia and the United States are investing heavily in alternative sources to reduce their reliance on China.
Northern Minerals’ Browns Range project is regarded as one of the few advanced potential sources of these minerals outside the Chinese supply chain.
Nationalising an ASX-listed resources company would be an exceptional intervention by the Australian Government.
However, the fact it is being considered shows how critical minerals are increasingly being treated as strategic assets rather than ordinary commodities.
Control over rare earths has become part of a wider geopolitical contest over the supply chains required for defence, clean energy and advanced technology.
