Australia’s Global Lithium Resources (ASX: GL1) is seeking to postpone its upcoming annual shareholder meeting until March due to concerns over a potential breach of foreign ownership rules.
The West Perth-based developer fears that Chinese national and minority shareholder Liaoliang “Leon” Zhu is attempting to gain control of the firm and its assets located near Kalgoorlie by joining the board and reducing the number of directors.
Global Lithium executive chairman, Ron Mitchell, called shareholders on Monday to vote against the appointment of Zhu and elect instead chief financial officer Matthew Allen as director.
The lithium company said on Friday it had approached the Western Australia Supreme Court, requesting more time for the Foreign Investment Review Board (FIRB) to examine the situation. The shareholder meeting is currently slated for Nov. 20.
Zhu’s company, Sincerity Development, owns 6.9% of Global Lithium and is part of a larger property development group with operations spanning Australia, China, and Southeast Asia.
The company says it is particularly worried about the possible transfer of control over its Manna lithium project. The asset, located near Kalgoorlie, is seen as pivotal to Australia’s strategy to safeguard ownership of key mineral resources.
Global says that its Manna project is vital to Australia’s broader objective of maintaining domestic control over critical mineral assets.
Manna’s combined indicated and inferred resource sits at 51.6 million tonnes at 1% lithium oxide (Li2O), with 515,000 tonnes of total contained Li2O. The indicated portion is pegged at 32.9 million tonnes with 1.04% Li2O.
Curbing Chinese hold
This case is part of a broader effort by the Australian government to limit foreign investment in strategic sectors, specifically critical minerals. The government has made it clear that such investments should come from “like-minded” nations — a term often interpreted as excluding Chinese entities.
A similar case ended in June with Treasurer Jim Chalmers mandating Yuxiao Fund, a Singapore-based investor with ties to China, to sell down its stake in Northern Minerals (ASX:NTU), an Australia-listed rare earths explorer, on national security grounds.
A year earlier, Chalmers had issued a prohibition order stopping Austroid Corporation and its Australian subsidiary from acquiring an additional 90.10% of lithium miner Alita Resources, which would have brought Austroid’s stake to 100%. The chairman of Austroid Australia is a Chinese national, Mike Que. He is the son of China’s Que Wenbin, who has a major interest in Chinese lithium battery maker Sichuan Western Resource.
Chinese Foreign Minister Wang Yi said during a March visit to Australia that he hoped Canberra would maintain a market environment free from discrimination against Chinese businesses.
A spokesperson for Chalmers replied that Australia’s foreign investment framework was non-discriminatory towards any country.
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