Australia ordered Chinese-linked shareholders to sell their shares in Northern Minerals, which is developing a rare earth mine.
Finance Minister Jim Chalmers said the orders were issued on Monday following concerns that Chinese investors had attempted to take control of the company.
The Australian company is developing the "Browns Range" project in the north of the state of Western Australia, to extract significant reserves of dysprosium and terbium, writes DW.
Six companies have been asked to sell their shares within two weeks.
Chalmers said the decision is aimed at protecting Australia's national interest and ensuring compliance with foreign investment rules.
"We operate a robust and non-discriminatory framework for foreign investment and will take further action if necessary to protect our national interest in this matter," he said.
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