FIRB in the Firing Line: Foreign Investment Rules Tighten Grip on Resources

Australia’s foreign investment regime is playing an increasingly decisive role in shaping capital flows into the mining and exploration sector, with even minority stakes and early-stage projects now attracting regulatory scrutiny.

Speaking at the 25th RIU Conference in Fremantle, Hamilton Locke Corporate and Foreign Investment partner Clementyne Rawlyk said FIRB has shifted from a compliance formality to a core deal consideration for resource companies.

Administered by the Federal Treasurer and advised by the Foreign Investment Review Board (FIRB), the regime screens foreign investments to ensure they align with Australia’s national interest - under what Rawlyk described as one of the world’s broadest and most complex frameworks.

Importantly, the rules extend beyond offshore investors. Companies with significant foreign ownership, including Australian-incorporated entities ultimately controlled overseas, can fall within the regime due to ownership tracing requirements.

Mining companies are frequently captured under FIRB’s “land-rich” provisions, where production and mining tenements are treated as interests in land. If more than 50% of an entity’s assets comprise Australian land interests, foreign investors must seek approval before acquiring 10% or more - regardless of deal size. Exploration tenements are generally excluded, providing some relief for early-stage explorers.

Foreign government investors face stricter thresholds, with approvals often required at or below the 10% level, particularly where governance rights provide influence. Rawlyk noted that private equity and investment funds may also be captured where government-linked capital is involved.

With national security considerations - especially around critical minerals and uranium - becoming increasingly central to assessments, FIRB is now a strategic factor in transaction timing and structuring.

For Australia’s resource sector, foreign investment approval is no longer an afterthought - it is part of the deal from day one.