Australian rare earths producer Northern Minerals (ASX: NTU) said on Tuesday that the federal government had prevented its largest shareholder, China’s Yuxiao Fund, from raising its stake in the company on grounds of national interest.
Yuxiao Fund needed the Foreign Investment Review Board’s (FIRB) approval to increase its holding in Northern Minerals to 19.9% from 9.92%. Beijing has condemned Australia for previously blocking Chinese investment on national security grounds, saying those moves have contributed to a years-long diplomatic freeze.
A reportby consultant at KPMG and The University of Sydney released last year, showed that Chinese investment in Australia has been steadily decreasing, falling almost 70% in 2021 to the lowest level since 2007.
The Labor government, in power since May last year, has moved to repair diplomatic relations with China after clashes in recent years over trade, influence in the South Pacific, and the origins of the covid-19 pandemic.
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