Treasurer Jim Chalmers prevents Austroid Company from buying Alita Sources after recommendation from funding board.
Australia has barred the takeover of financially stricken lithium miner Alita Sources by a China-linked firm after recommendation from Australia’s Overseas Funding Evaluation Board, a spokesperson for Treasurer Jim Chalmers has mentioned.
Chalmers issued a prohibition order stopping Austroid Company from buying an extra 90.10 p.c of lithium miner Alita Sources, which might carry its stake to one hundred pc. Austroid Australia, the native subsidiary of the US-based Austroid, can also be barred from a proposal to wholly purchase Alita, a prohibition discover reveals.
The director of Austroid Australia is a Chinese language nationwide with expertise within the Chinese language mining business, firm filings present.
Alita has been underneath administration since 2019. Austroid mentioned in a press release on Friday it was “shocked and upset” by the choice to dam the takeover deal which might convert debt to fairness, and mentioned it was but to completely perceive the implications for the operation of the Bald Hill lithium mine, which exports to China.
Chalmers’ spokesperson mentioned in a press release to the Reuters information company: “The Treasurer has issued a prohibition order in line with recommendation from the Overseas Funding Evaluation Board.”
Chalmer’s workplace declined to say whether or not the acquisition had been blocked on nationwide curiosity grounds.
Austroid Company’s director is Mike Que, filings present. He’s the son of Que Wenbin, who has a significant curiosity in Chinese language lithium battery maker Sichuan Western Useful resource.
Que can also be a director of the Alita subsidiary operating the Bald Hill lithium mine. He was additionally the only real director at China Hydrogen Vitality Restricted (CHEL), a Cayman Islands firm, which was unable to get FIRB approval for a 2019 takeover try of Alita, firm filings present.
In a speech final yr, Chalmers mentioned Australia, the world’s prime lithium provider, would change into extra selective about who it let spend money on its crucial minerals business.
China has criticised Australia for blocking Chinese language funding on nationwide safety grounds, and China’s prime diplomat, Wang Yi, mentioned final week after assembly Australian Overseas Minister Penny Wong that Australia ought to present a “non-discriminatory enterprise surroundings for Chinese language enterprises to speculate” in Australia.
“The federal government doesn’t touch upon the appliance of overseas funding screening preparations,” Chalmers’ spokesperson mentioned.
China dominates crucial minerals processing, accounting for greater than 80 p.c of world uncommon earths manufacturing, and holds giant investments in lithium and different mining and processing operations in Australia, Africa and South America.
Alita’s directors, McGrath Nicol, mentioned in a discover to shareholders on Wednesday that Austroid had mentioned it had withdrawn an utility to the Overseas Funding Evaluation Board and meant to make a brand new utility.
“Austroid is shocked and upset by this determination,” Austroid mentioned in a press release.
“We’re at an entire loss to grasp the explanations for this determination, given our full cooperation and detailed responses to any questions requested by FIRB throughout this course of,” it added.
Austroid mentioned it had invested vital funding in Bald Hill to permit it to restart operations in 2022 after directors have been appointed in 2019.
