Australian miner Global Lithium Resources has appealed to the Australian Government to intervene in a possible takeover attempt of its Manna lithium project in Western Australia by Chinese investors.
This move comes after the Australian Takeovers Panel declined to review the company’s concerns about potentially unlawful shareholder associations, reported Reuters.
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The situation presents a challenge for the Australian Government, which is promoting critical minerals projects to spur economic growth and strengthen security ties with the US, without straining relations with China, its largest resources customer, the report said.
Global Lithium halted the development of its Manna lithium project in late 2023 due to a downturn in the battery materials market.
The company is urging the treasurer, advised by the Foreign Investment Review Board, to restrict the involved shareholders’ influence at the upcoming shareholder meeting.
Global Lithium’s management, led by executive chairman Ron Mitchell, has alleged that director Dianmin Chen is collaborating with foreign investors that hold between 30% and 40% of shares of the company to gain control over the board and its main asset.
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By GlobalDataThe management has recommended that shareholders oppose the reappointment of Chen and the appointment of other Chinese-born directors, as well as a proposal to limit the board to three members.
Mitchell has raised concerns about undisclosed associations among shareholders potentially breaching Australian takeover laws.
Global Lithium’s top shareholders include Mineral Resources and Canmax Technologies, the latter owned by Chinese billionaire Pei Zhenhua. Neither company has commented on the dispute.
Additionally, Global Lithium’s third-biggest shareholder, Chinese-born property developer Liaoliang Zhu, who controls Sincerity Group, has expressed interest in joining the board, emphasising the importance of focusing on core lithium assets.
In an Australian Securities Exchange filing dated 15 November 2024, the company said: “Global Lithium’s foreign control concerns pertain to the circumstances surrounding a potential change of board control of the company and the possible consequences for all shareholders.
“These concerns also include the potential for transfer of effective control of Global Lithium’s 100% owned Manna Lithium Project (Manna) near Kalgoorlie without a control transaction taking place or premium being paid.”
The Australian Treasury, bound by confidentiality under the Foreign Acquisitions and Takeovers Act of 1975, has not commented on the case.
As the company seeks a new sales deal following the lapse of a ten-year supply agreement with Canmax in December, the outcome of this boardroom battle could impact Global Lithium’s future direction, the report added.
