Denied Chinese rare earth bid 'helps mitigate risk'

A security expert says the blocking of a Chinese-backed company from increasing its share in a producer of heavy rare earth minerals will help mitigate the risk of Chinese coercion.

Treasurer Jim Chalmers has blocked Yuxiao Fund from increasing its ownership in Northern Minerals from 9.9 per cent to 19.9 per cent.

Australian National University's John Blaxland says the decision threw up a real challenge for Australia, which has been a mainstay supplier to China of unprocessed minerals, especially lithium which is used in batteries.