Ostroid's Alita Resource Acquisition Denied
The Australian government has blocked a company with Chinese capital from acquiring an Australian lithium mine.
On the 21st (local time), according to The Australian and other sources, the Australian Treasury Department, following the advice of the Foreign Investment Review Board (FIRB), issued an order prohibiting Ostroid Corporation from acquiring shares in Alita Resources, a financially troubled lithium mining company.
Lithium is an essential mineral for making electric vehicle batteries, but after lithium prices plummeted in 2019, Alita's management deteriorated, and it is currently under administration.
Ostroid, which sought to acquire shares in Alita, is a company headquartered in the United States. Through its Australian subsidiary, Ostroid Australia, it attempted to acquire an additional 90.1% of Alita's shares to secure 100% ownership. Although the company is headquartered in the U.S., its actual owner is known to be Chinese capital.
In 2019, a Chinese company called China Hydrogen Energy (CHEL) purchased Alita's debt and applied to FIRB for management rights acquisition. However, in 2020, the Australian government blocked this, and CHEL sold Alita's debt to Ostroid, which is registered in the U.S. Ostroid's registered director, Mike Qiu, is Chinese, and he is also a registered director of CHEL.
His father, Qiu Wenbin, owns Sichuan Western Resources in China, a lithium battery and electric vehicle manufacturer. Although the company attempting to acquire Alita changed, it is effectively the same Chinese capital.
Additionally, Mike Qiu is also a director of Lisco, a subsidiary of Alita that operates the Bold Hill mine. This company has been investigated for selling lithium to China at prices far below market value.
When the Australian government blocked the acquisition of the lithium mining company, The Australian interpreted it as a clear stance by the Albanese government against foreign ownership of Australia's critical mineral companies.
There are concerns that this incident could worsen relations with China, with whom Australia has been showing signs of reconciliation. On the 14th, Wang Yi, a member of the Chinese Communist Party Central Political Bureau, met with Penny Wong, Australia's Foreign Minister, at the ASEAN Foreign Ministers' Meeting held in Indonesia, where Wong requested that the Australian government provide Chinese companies with a "non-discriminatory business environment."
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