Australia’s Global Lithium Resources is calling on the government to intervene and prevent what it views as a takeover attempt by Chinese investors of its key asset, the Manna lithium project, ahead of an important shareholder meeting this week.
The company is seeking government action after the nation’s Takeovers Panel recently declined to review its claims of an unlawful association among China-linked shareholders who may be attempting to take control of the lithium project in Western Australia.
This dispute has put the Australian government in a delicate position as it seeks to balance the promotion of critical minerals projects for economic growth and enhanced security ties with the United States, all while avoiding tensions with its major resources partner, China.
Global Lithium’s management is urging Australia’s Treasurer, who relies on advice from the Foreign Investment Review Board (FIRB), to force shareholders seeking board changes to reduce their stakes. A ruling from the Western Australia Supreme Court in November suggested that the Treasurer could block these shareholders from voting at Thursday’s meeting.
The company had halted the development of the Manna lithium project late last year due to the ongoing downturn in the battery raw materials market.
In filings with regulators, Global Lithium’s management accused director Dianmin Chen of working with a group of foreign-linked investors holding between 30% and 40% of the company’s shares to seize control of the board and its flagship asset.
Claims of Potential Legal Violations
Led by Executive Chairman Ron Mitchell, Global Lithium has advised shareholders to reject proposals to reappoint Chen, install additional Chinese-born directors, and limit the board to just three members. Chen, however, did not respond to requests for comment.
Mitchell has raised concerns that an undisclosed association between certain shareholders could violate Australia’s takeover laws and the Foreign Acquisitions and Takeovers Act. These allegations were included in filings with the Australian Securities Exchange (ASX), the Western Australian Supreme Court, and a report to Australia’s Treasury last year.
“These concerns include the potential for an unlawful transfer of control over Global Lithium’s 100% owned Manna Lithium Project without an actual control transaction or a premium being paid,” the company stated in a November ASX filing, adding that the Treasury is taking these claims “very seriously.”
While Global Lithium and Mitchell have refrained from making further comments on the ongoing board dispute, as the matter is under regulatory review, the Treasury declined to comment on any foreign investment cases due to confidentiality protections under the Foreign Acquisitions and Takeovers Act of 1975.
Despite Global Lithium’s efforts, the Takeovers Panel rejected the company’s request to investigate the alleged “unacceptable circumstances,” asserting that the evidence pointed more to shareholder pressure rather than a coordinated attempt to seize control.
In a similar case in 2023, Australia blocked a Chinese investor from increasing its stake in a rare earths mining firm following advice from the FIRB. The FIRB declined to comment on the current Global Lithium dispute.
Investor Dynamics and China Ties
Global Lithium’s two largest shareholders, Australia’s Mineral Resources and Canmax Technologies—controlled by Chinese billionaire Pei Zhenhua, a key figure in battery giant CATL—each hold nearly 10% of the company. Canmax did not respond to requests for comment, and Mineral Resources declined to comment.
In August, Chinese-born property developer Liaoliang (Leon) Zhu, who controls Sincerity Group, Global Lithium’s third-largest shareholder, pushed to join the board in a letter to fellow shareholders. “We must focus on our core lithium assets and stop pretending that a short-term strategy of exploring for gold and copper is a valid response to the dramatic decline in shareholder value,” Zhu stated on his website.
Zhu, through his lawyer, referred to the Takeovers Panel’s findings and declined further comment.
Should a board controlled by Zhu and Chen gain power, it could challenge Mitchell’s leadership at a critical juncture as Global Lithium seeks to secure a new sales deal following the expiration of its ten-year supply agreement with Canmax in December.
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