In a high-stakes dispute over foreign investment in Australia’s critical minerals sector, Global Lithium Resources (ASX: GL1) has called on the government to intervene in what it describes as an unlawful takeover attempt by China-linked investors seeking control of its flagship lithium asset, the Manna lithium project in Western Australia.

As the company approaches a key shareholder meeting this Thursday, Global Lithium is intensifying its efforts to block a boardroom shake-up, claiming that a coalition of foreign investors—allegedly holding between 30% and 40% of its shares—is attempting to gain control of the company through strategic board appointments.

Global Lithium’s concerns were amplified last week when the Australian Takeovers Panel declined to investigate the alleged breaches of foreign ownership laws, leaving the company without immediate regulatory relief.

The company has specifically accused one of its directors, Dianmin Chen, of collaborating with Chinese investors to orchestrate a board takeover that would give them control over Manna, a lithium project viewed as vital to Australia’s strategic interest in maintaining domestic ownership of key mineral resources.

Government Intervention Sought

In response, Global Lithium’s management has directly appealed to Australian Treasurer Jim Chalmers to intervene. The Treasurer, advised by the Foreign Investment Review Board (FIRB), has the authority to take action against the investors pushing for board changes.

Potential measures could include:

•Compelling the shareholders in question to reduce their stakes

•Prohibiting them from voting at the upcoming shareholder meeting

The Western Australia Supreme Court previously acknowledged in a November 2024 ruling that such steps could be legally justified, particularly in cases involving national security concerns.

Global Lithium’s executive chairman, Ron Mitchell, has urged shareholders to reject motions aimed at reshuffling the board—including the reappointment of Chen and the appointment of additional Chinese-born directors.

A motion to limit the board to three members is also on the table, which Mitchell argues would cement foreign influence over the company. This dispute underscores Australia’s broader effort to limit foreign investment in critical minerals, particularly by entities linked to China. The government has signaled that investment in strategic sectors should primarily come from “like-minded” nations—a term widely understood to exclude Chinese companies and investors.

Manna Lithium Project at Risk?

The Manna lithium project, located near Kalgoorlie in Western Australia, is considered an important asset in Australia’s lithium supply chain. However, development was paused in late 2023, with Global Lithium citing a prolonged downturn in the battery raw materials market.

The project’s mineral resource estimate stands at 51.6 million tonnes (Mt) at 1% lithium oxide (Li₂O), with 515,000 tonnes of total contained Li₂O. Indicated resources alone account for 32.9 Mt at 1.04% Li₂O.

The lithium sector remains a key pillar of Australia’s economy, with the federal government increasing scrutiny of foreign investment in mining projects to prevent critical resources from falling under overseas control.

Global Lithium’s case echoes a similar government crackdown on foreign ownership earlier in 2024. In June 2024, Treasurer Jim Chalmers ordered Singapore-based Yuxiao Fund, which has ties to China, to sell down its stake in Northern Minerals (ASX: NTU), an Australian rare earths explorer, on national security grounds.

That decision reinforced Canberra’s tougher stance on foreign investment in strategic industries, with officials emphasizing that the country must maintain control over resources essential to its economic and national security interests.

With the crucial shareholder meeting scheduled for this Thursday, the outcome could determine whether Global Lithium maintains its current leadership or if the alleged China-linked investor group succeeds in reshaping the board.

The Australian government now faces mounting pressure to act, either by intervening directly in Global Lithium’s case or by strengthening regulations to further restrict foreign investment in the critical minerals sector.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

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