Northern Minerals moves quick after China orders with $48m capital raise to get Browns Range back on track

Australia’s most intriguing rare earths mining hopeful has lined up investor funds to complete a key piece of the development puzzle for its Browns Range project in the East Kimberley. Northern Minerals, which has been shackled in a geopolitical tug-of-war between China and Australia, on Monday locked in $43 million from new and existing shareholders via a share placement. The company is gunning for another $5m with a share purchase plan to existing shareholders. Both the placement and purchase plan are at a 20.8 per cent discount to the stock’s previous closing price of 2.4¢. Northern Minerals said it now has the cash to complete the definitive feasibility study for Browns Range and can move towards a final investment decision for the heavy rare earths project in the first half of next year. FID was originally slated for months ago but progress at Browns Range has been pushed off track by Sino-Australian tensions over the rare earths market. Yuxiao Fund and four other associates with ties to Chinese conglomerates were ordered by Treasurer Jim Chalmers on June 3 to offload a chunk of their stakes in Northern Minerals — equivalent to 10.4 per cent of the strategically-important mining company — to “protect our (Australia’s) national interest”. The 91-day deadline to sell the shares expired earlier this month, but one unnamed shareholder flouted the order. That errant shareholder was not named. Yuxiao Fund — once Northern Minerals’ largest shareholder — has completely bailed out of the company. But two mysterious Hong Kong-based entities are now at the pointy end of the register. Qogir Trading has 8.45 per cent and Hong Kong Ying Tak holds 8.37 per cent. “The company is in the process of seeking meetings with both its new significant shareholders,” Northern Minerals said earlier this month. On Monday a Northern Minerals spokesman said it had been “in touch with one of (our) newer larger shareholders”. The elections of four Chinese-linked businessmen, who were not endorsed by the existing Northern Minerals board, got voted down at the company’s annual general meeting in May. Two of the four proposed appointments were overwhelmingly defeated, but the elections of two others were narrowly avoided. The heavy rare earth elements from Browns Range will be used to create the high-tech magnets that enable modern defence equipment, like precision-guided missiles. Heavy rare earths have a higher atomic weight than their ‘light’ counterparts and are less common. China’s stranglehold on the rare earths market predominately relates to its near total domination of the heavy market segment. China in December banned the export of heavy rare earths extraction and separation technologies to further tighten control. Northern Minerals has a market value of about $150m.