The
Precedent

In 2013, at the launch of the 21st Century Maritime Silk Road, Tsingshan Holding Group signed a memorandum of understanding witnessed by Xi Jinping and then-Indonesian President Susilo Bambang Yudhoyono to develop the Indonesia Morowali Industrial Park — IMIP — in Central Sulawesi. The signing was not a quiet transaction between private parties. It was a Belt and Road flagship project, publicly celebrated, with heads of state in attendance.

What followed was not a mining investment. It was the construction of an industrial city. IMIP now encompasses ports, coal-fired power plants, dedicated logistics systems, smelting complexes, and a labor force of tens of thousands — the majority Chinese nationals — in a region of Indonesia that had no comparable industrial infrastructure before Tsingshan arrived. Over the following decade, China invested over $65 billion in Indonesia's nickel sector, acquiring control of approximately 90 percent of Indonesia's nickel mines and smelters.

The mechanism that locked in the supply chain was not ownership alone. In 2019, Indonesia banned the export of raw nickel ore — a policy of resource nationalism that sounds like a win for Indonesian sovereignty. It was not. The ban forced all nickel processing to occur domestically, which meant it had to occur in the industrial parks that Chinese companies had spent six years building. Smaller Indonesian mining companies, who had previously sold ore to buyers around the world, could now only sell to the Chinese-dominated smelter complexes within Indonesia. A Center for Advanced Defense Studies report found that two Chinese companies — Tsingshan and Jiangsu Delong — control more than 70 percent of Indonesia's refining capacity alone. The export ban that was supposed to help Indonesia capture more value from its resources instead created what analysts have called an "oligopsony" — a market with so few buyers that the buyers set the price.

The environmental and safety record of these operations is not a secondary concern. Between 2015 and 2023, over 90 workers died and more than a hundred were injured in Chinese-run facilities in Indonesia. A fire at a Tsingshan facility in December 2023 resulted in worker fatalities and negligence charges. Violent clashes at a Jiangsu Delong-owned smelter left two workers dead. Local communities report widespread respiratory infections — nearly 7,000 cases since 2018 — and the destruction of traditional fishing grounds through water pollution. The coal-fired power plants that run the smelter complexes emit at levels that would not be permitted in China itself.

Indonesia holds 42 percent of the world's nickel reserves. By 2030, it is projected to account for 44 percent of global refined nickel production. The United States and European automakers are structurally dependent on a supply chain they do not control, for a material they cannot source elsewhere at scale, processed in facilities whose environmental record they cannot regulate.

China Nonferrous Metal Mining Company — CNMC — entered Zambia in 1998, acquiring an 85 percent stake in the Chambishi mine. The acquisition was the beginning of a pattern that would repeat across the African continent: entry during economic weakness, expansion during crisis, accumulation of debt leverage that constrained future governance decisions.

The critical expansion moment came during the 2008 global financial crisis. As Western mining companies reduced production, closed operations, and laid off workers across Zambia's Copperbelt, CNMC announced it would not reduce investment by a penny, not reduce production by a tonne, and not lay off a single employee. It then acquired the Luanshya mine — which had ceased production under Swiss ownership — and expanded its Zambian operations at precisely the moment its Western competitors were retreating. The optics were of a reliable partner staying when others fled. The strategic reality was the acquisition of distressed assets at crisis pricing, expanding market position when competitive pressure was at its lowest.

Over 600 Chinese firms have since invested more than $3.5 billion in Zambia's Copperbelt. CNMC's Chambishi operations produce roughly 100,000 tons of copper annually, with most of the refined product shipped to China. Zambia accumulated over $5 billion in debt to China, debt that — as civic groups explicitly noted — constrained the government's willingness to enforce environmental and labor regulations against Chinese operators who were simultaneously among the country's largest taxpayers and creditors.

On February 18, 2025, a tailings dam at Sino-Metals Leach Zambia — a Chinese state-owned enterprise — failed catastrophically at its Chambishi facility. Approximately 50 million liters of highly toxic effluent containing concentrated acid and dissolved heavy metals flowed into the Mwambashi stream and from there into the Kafue River — Zambia's most important waterway, the primary water source for approximately 60 percent of the country's 20 million citizens. Water supplies to Kitwe, a city of 700,000 people, were completely shut down. Dead fish washed onto riverbanks for more than 100 kilometers downstream. Agricultural crops along the river were destroyed.

Independent experts contracted by Sino-Metals to assess the damage found that 1.5 million tons of toxic sludge had spilled — 30 times more than the official estimate. Approximately 900,000 cubic meters of toxic waste remained in the environment. Sino-Metals terminated the contractor's contract the day before its final report was due. The Zambian government, holding $5 billion in Chinese debt and relying on Chinese companies for a significant share of its tax revenue, initially told its citizens not to worry. One hundred seventy-six farmers subsequently filed an $80 billion lawsuit — one of the largest environmental suits in Zambian history.

The US and Finnish governments advised their citizens to evacuate the affected area.

Northern Minerals is a small ASX-listed rare earths company developing the Browns Range heavy rare earths project in Western Australia — one of the most significant deposits of dysprosium and terbium outside China. Heavy rare earths are essential for the high-performance permanent magnets used in EV motors and defense applications. China controls approximately 85 percent of global rare earth processing. Northern Minerals represented a potential break in that monopoly.

In 2022, a Singapore-registered investment fund called Yuxiao Fund — controlled by Chinese businessman Wu Tao, chairman of mainland China-based Jinan Yuxiao Group — applied to Australia's Foreign Investment Review Board for approval to raise its stake in Northern Minerals from 9.81 percent to 19.9 percent. The FIRB rejected the application in February 2023, citing national security concerns. That should have ended the matter.

It did not. Northern Minerals subsequently discovered that Yuxiao Fund had coordinated with a set of apparently separate entities — Black Stone Resources (British Virgin Islands), Indian Ocean International Shipping and Service Company (UAE), and at least two other unnamed entities — to acquire additional shares that, combined with Yuxiao's existing holdings, would approach the 20 percent threshold that triggers mandatory disclosure under Australian takeover law. The structure was not a single company with an obvious Chinese connection. It was a web of entities registered across multiple jurisdictions — Singapore, British Virgin Islands, UAE — each apparently independent, acting in concert.

In June 2024, Australian Treasurer Jim Chalmers issued a divestment order requiring the five entities to sell their combined 10.4 percent stake within three months. They did not comply. In June 2025, the Australian government filed unprecedented legal action against the entities for failing to comply with the divestment order — the first time an Australian Treasurer had brought Federal Court proceedings for alleged breaches of the foreign investment framework.

During the period of this dispute, Northern Minerals suffered a significant cybersecurity breach and data theft in March 2024. The timing — occurring while the company was at the center of a foreign investment dispute with Chinese-linked entities — was noted by Australian security analysts, who described the coincidence as, at minimum, worth considering.

The defense worked. Northern Minerals' rare earth project remains Australian-controlled. The Iluka rare earths refinery — partially government-funded — is processing Browns Range output. Australia is now the first country outside China to produce commercial quantities of dysprosium oxide. The supply chain is intact.

But notice what it cost. A dedicated foreign investment review board with statutory authority to block and unwind acquisitions. A Treasurer with the political will to issue a divestment order against a major investor. Federal Court proceedings against entities that refused to comply. Years of regulatory process. And even then, the beneficial ownership structure — Singapore, BVI, UAE — was sophisticated enough that Northern Minerals itself had to report the suspicious share buying activity to FIRB before regulators became aware of the coordinated acquisition attempt.