SYDNEY - Australia has barred the takeover of financially stricken lithium miner Alita Resources Ltd by a China-linked company after advice from Australia's Foreign Investment Review Board, a spokesperson for Treasurer Jim Chalmers said Friday.
Chalmers issued a prohibition order stopping Austroid Corporation from acquiring an additional 90.1% of lithium miner Alita Resources, which would bring its stake to 100%. Austroid Australia, the local subsidiary of the U.S.-based Austroid, is also barred from a proposal to wholly acquire Alita, a prohibition notice shows.
The director of Austroid Australia is a Chinese national with experience in the Chinese mining industry, company filings show.
Alita has been under administration since 2019. Austroid said in a statement it was "shocked and disappointed" by the decision to block the takeover deal which would convert debt to equity and said it was yet to fully understand the implications for the operation of the Bald Hill lithium mine, which exports to China.
Chalmers' spokesperson said in a statement to Reuters: "The Treasurer has issued a prohibition order consistent with advice from the Foreign Investment Review Board."
Chalmer's office declined to say whether the acquisition had been blocked on national interest grounds.
Austroid Corporation's director is Mike Que, filings show. He is the son of Que Wenbin, who has a major interest in Chinese lithium battery maker Sichuan Western Resource.
Mike Que is also a director of the Alita subsidiary running the Bald Hill lithium mine. He was also sole director at China Hydrogen Energy Limited (CHEL), a Cayman Islands company, which was unable to get FIRB approval for a 2019 takeover attempt of Alita, company filings show.
In a speech last year Chalmers said Australia, the world's top lithium supplier, would become more selective about who it let invest in its critical minerals industry.
China has criticized Australia for blocking Chinese investment on national security grounds, and China's top diplomat, Wang Yi, said last week after meeting Australian Foreign Minister Penny Wong that Australia should provide a "non-discriminatory business environment for Chinese enterprises to invest" in Australia.
"The government doesn't comment on the application of foreign investment screening arrangements," Chalmers' spokesperson said.
China dominates critical minerals processing, accounting for more than 80% of global rare earths production and holding large investments in lithium and other mining and processing operations in Australia, Africa and South America.
Alita's administrators, McGrath Nicol, said in a notice to shareholders Wednesday that Austroid had said it had withdrawn an application to the Foreign Investment Review Board and intended to make a new application.
"Austroid is shocked and disappointed by this decision," Austroid said in a statement.
"We are at a complete loss to understand the reasons for this decision, given our full cooperation and detailed responses to any questions asked by FIRB during this process," it added.
Austroid said it had invested significant funding in Bald Hill to allow it to restart operations in 2022 after administrators were appointed in 2019.