MELBOURNE, June 3 (Reuters) - Australian Treasurer Jim

Chalmers has ordered several China-linked investors to dispose

of shares in rare earths miner Northern Minerals ( NOURF ) on

national interest grounds, a spokesperson said on Monday.

Northern Minerals ( NOURF ) is developing the Browns Range heavy rare

earths project in Western Australia, at a time when the sector

has become increasingly strategic for its uses in green energy

and defence.

A disposal order issued by Chalmers on Sunday said Yuxiao

Fund had 60 days to dispose of 80 million shares it bought in

September. Yuxiao Fund is the Singapore-registered private

investment vehicle of Chinese national Wu Yuxiao, Reuters has

previously reported.

The fund had sought Foreign Investment Review Board (FIRB)

approval to raise its ownership to 19.9% in 2022, from 9.81% of

Northern Minerals ( NOURF ), but was declined last year.

Northern Minerals ( NOURF ) Chairman Adam Handley in a statement to

Reuters said that it had referred certain share buying activity

to the FIRB to investigate last October.

"Northern Minerals ( NOURF ) made the referral to FIRB because of our

duty to act in the best interests of all shareholders, ensure

the integrity of the company's share register and uphold our

high standards of good governance," he said, adding that it

would have no impact on its development of the Browns Range

mine.

In aggregate, the number of shares that must be divested

amounts to around 10.4% of Northern Minerals' ( NOURF ) issued share

capital, it noted, which, added to Yuxiao Fund's holdings, would

come close to 20%, the point at which a party would have to

declare its intentions under Australian takeover law.

Northern Minerals ( NOURF ) has said the fund was controlled by Wu

Tao, the chairman of mainland China-based Jinan Yuxiao Group.

Other foreign shareholders ordered to dispose of shares

within 60 days include Ximei Liu, Xi Wang, and Black Stone

Resources, the notice said.

"The Treasurer has issued orders that Yuxiao Fund Pte Ltd

and four associates reduce their shareholdings in Northern

Minerals ( NOURF )," a spokesperson for Chalmers said in a statement on

Monday.

"The decision, based on advice from the Foreign Investment

Review Board, is designed to protect our national interest and

ensure compliance with our foreign investment framework."

Browns Range is set to supply Iluka Resources' ( ILKAF )

Eneabba rare earths refinery under construction in Western

Australia, which already has a A$1 billion($665.10 million)

funding pledge from the Australian government and is waiting on

a decision for more.

Australia has said it is looking for friendly nations to

build out its critical minerals industry as the West diversifies

away from dominant producer China.

Last week Northern Minerals ( NOURF ) Chairman Nick Curtis exited the

company's board. Curtis declined to comment. Shares in Northern

Minerals ( NOURF ) were little changed at A$0.035. The company's annual

general meeting is on June 6.

Canberra screens foreign investment in key sectors for

national security, including critical minerals, and has blocked

some Chinese deals which has irked Beijing. Australia is

preparing for a visit by Chinese Premier Li Qiang later this

month.

Chinese Foreign Minister Wang Yi said on a visit in March

that he hoped Australia would ensure its market environment did

not discriminate against Chinese business.

Chalmers' spokesperson said Australia's foreign investment

framework did not discriminate against any nation.

($1 = 1.5035 Australian dollars)