Australia ordered a string of China-linked shareholders to sell their stakes in a rare earths firm on Monday (May 18, 2026), citing the need to protect the sector from foreign control.

Northern Minerals is vying to challenge China's dominance of dysprosium production, a rare earth mineral used to make high-performance magnets used in electric vehicles.

Chinese investors have been snapping up shares in an effort to exert sway over the firm — on one occasion even launching a bid to topple its chair.

Wary of a stealth takeover, the company referred itself to Australia's foreign investment review board in November 2025.

Treasurer Jim Chalmers said six shareholders would be forced to exit Northern Minerals.

"We operate a robust and non-discriminatory foreign investment framework and will take further action if required to protect our national interest in relation to this matter," he said in a statement.

Three of those shareholders had addresses listed in China, two were listed in Hong Kong, and one was listed in the British Virgin Islands.

The list included some of Northern Minerals' largest single shareholders, including Beijing-based Vastness Investment Group, which held more than six percent of the firm.

Vastness tried to use its sizeable stake to replace the chair of Northern Minerals earlier this year.

It eventually withdrew its bid to vote on the company's leadership at an extraordinary general meeting.

Hong-Kong based Qogir Trading and Service Company separately holds almost 5% of Northern Minerals.

Australia has over the past two years waged a running battle to pry Northern Minerals away from Chinese investors.

It used the same foreign takeover laws in 2024 to force a different group of Chinese investors to sell shares in Northern Minerals.

Northern Minerals said it was "currently considering the new disposal orders and will make a further announcement once it has done so".

The United States signed a deal in October last year unlocking greater access to Australia's deposits of rare earths and critical minerals.

Northern Minerals was one of the Australian companies singled out under the deal, which touted the need to "diversify critical supply chains".

Enormous influence

China controls some of the world's largest reserves of rare earth elements.

It wields enormous influence as almost the sole country able to refine the metals on an industrial scale.

Manufacturing nations such as the United States, Germany, and South Korea are on the hunt for alternative sources.

Northern Minerals has the rights to a substantial dysprosium deposit found at Browns Range in Western Australia.

It bills itself as a "reliable alternative source" to "production sourced from China".

Almost 99% of the world's dysprosium is currently produced in China, according to the company.

The China-linked Yuxiao Fund sought to up its stake in Northern Minerals in 2024, a move that drew the attention of Australia's Foreign Investment Review Board.

Yuxiao Fund and four other associated shareholders were subsequently given 60 days to dispose of their interests in the company.

The Australian Securities Exchange halted trading in Northern Minerals on Monday (May 18) morning.