Australia has filed a lawsuit against Indian Ocean International Shipping and Service Company and a former associate for allegedly breaching foreign investment laws related to rare earths miner Northern Minerals.
Treasurer Jim Chalmers said on Thursday that he had initiated legal action in the Federal Court, seeking penalties, declarations, and costs. The case is the first of its kind brought by a Treasurer before the Federal Court under Australia’s foreign investment rules.
Indian Ocean International Shipping and Service Company was one of five foreign investors linked to China that were ordered in June last year to divest shares in Northern Minerals on national interest grounds. The statement did not name the former associate or detail current shareholdings.
Chalmers said foreign investors must comply with Australian law, and that the action is intended to protect the national interest and maintain the integrity of the investment framework. Indian Ocean could not be reached for comment.
Australia has been working to reduce its dependence on China for rare earths, which are essential in manufacturing products such as smartphones, wind turbines, and military equipment. Northern Minerals supplies rare earths to a refinery under construction by Iluka Resources in Western Australia.
In 2023, Australia blocked Singapore-based Yuxiao Fund from increasing its stake in Northern Minerals to nearly 20%. The fund is controlled by Chinese businessman Wu Tao.
In 2024, the Australian government ordered five foreign entities, including Yuxiao Fund, Black Stone Resources of the British Virgin Islands, and Indian Ocean International Shipping and Service Company, to sell a combined 10.37% stake in Northern Minerals within three months to unrelated parties.
