Australia has mandated that several investors linked to China divest their stakes in rare earth company Northern Minerals, highlighting concerns regarding foreign influence in a crucial sector.

This announcement was made on Monday as part of Australia’s ongoing efforts to safeguard critical mineral industries linked to national security and the supply chains for advanced technology.

As one of Australia’s top rare earth firms, Northern Minerals aims to lessen China’s grip on the production of dysprosium, a vital mineral utilized in high-performing magnets for electric vehicles and advanced electronic devices.

Government representatives indicated that this action is vital for Australia to retain oversight of industries connected to critical resources and future energy technology.

Globally, rare earth minerals are increasingly significant as they play a role in electric vehicles, defense frameworks, renewable energy solutions, and electronic gadgets. Currently, China exerts considerable control over the global rare earth supply chain.

This decision may escalate tensions between Australia and China, particularly as the two nations vie for dominance in trade, investments, and access to strategic resources.

Experts in the industry suggest that Australia is working to bolster its local rare earth production capabilities and lessen reliance on foreign-controlled supply chains.

Northern Minerals has garnered international interest lately due to its pursuit to become a principal supplier of dysprosium outside the Chinese market.