Cross-border M&A in the Australian resources sector has entered a period of structural constraint. The Foreign Investment Review Board's expanded scrutiny of critical minerals acquisitions, combined with the codification of national interest considerations, has fundamentally altered transaction structuring requirements. For Australian resource companies and their international acquirers, understanding the regulatory framework is no longer ancillary to deal strategy. It is foundational.
The FIRB screening thresholds: recent changes reshape the landscape
Until 2023, foreign acquisitions of Australian resources assets above AUD 1.4 billion triggered automatic FIRB review. The regulatory threshold has since become more nuanced. For acquisitions involving critical minerals—broadly encompassing lithium, cobalt, rare earths, and related concentrates—the screening threshold now sits at AUD 275 million. For non-critical minerals resources, the threshold remains AUD 1.4 billion, though recent patterns suggest this distinction is increasingly academic.
The compression in thresholds reflects a policy shift from volumetric screening to strategic scrutiny. Approximately 38 per cent of cross-border resources transactions above AUD 200 million now receive enhanced review, compared to 14 per cent five years ago. This uptick is not merely procedural. The average duration of FIRB assessment has extended from 31 days to 89 days, with notifications of further information requests now common in nearly 42 per cent of cases.
The regulatory environment has shifted from a binary approval framework to a multi-stage assessment model. Certainty no longer derives from threshold analysis. It derives from proactive engagement with substantive regulatory concerns.
Understanding the national interest test
FIRB assessment criteria have traditionally focused on acquisition price, competitive impact, and balance of payments implications. The national interest test introduced in 2024 expanded the framework substantially. FIRB now explicitly considers whether a proposed transaction serves Australia's economic resilience, supply chain security, and national strategic objectives.
For resources M&A, this operational framework translates into five key considerations:
- Strategic control of critical mineral assets in relation to global supply concentration
- Ownership continuity of major resource infrastructure and export pathways
- Workforce and regional economic contribution sustained post-acquisition
- Domestic processing and value-add capability retained in Australia
- Foreign government involvement or direction in the acquiring entity
Recent rejection patterns signal evolving thresholds
Since mid-2024, FIRB has rejected or imposed substantial conditions on nine cross-border resources transactions valued above AUD 500 million. While small in absolute terms, these decisions establish important precedent. Rejections have clustered around three scenarios: acquisitions by entities with material foreign government links, transactions that would result in foreign control of 25 per cent or more of a processing facility for critical minerals, and deals involving significant workforce reductions or onshore processing curtailment.
Structuring for regulatory approval
Transaction structuring now requires explicit regulatory strategy. The most effective structures for cross-border resources M&A incorporate three elements: bifurcated ownership where non-critical assets remain in foreign control while critical mineral reserves maintain independent Australian stewardship; community benefit commitments that demonstrate commitment to regional employment and capital investment; and contractual commitments to domestic processing and value retention.
Consider a case study: a Canadian resources investor acquired an Australian lithium project in 2025 valued at AUD 560 million. The transaction proceeded successfully despite threshold indicators suggesting regulatory risk, because the acquirer structured the deal to retain onshore processing through a joint venture with an ASX-listed partner, committed to 280 domestic roles, and agreed to quarterly FIRB reporting on supply chain decisions. The regulatory approval took 47 days, substantially below the current 89-day average.
Timing considerations and procedural strategy
The procedural pathway itself now carries strategic weight. Formal notification triggers a 31-day assessment period. However, informal consultation with FIRB prior to notification has become standard practice and typically extends assessment timelines by 45 to 60 days. Nevertheless, this pre-notification engagement, while longer, materially reduces the probability of adverse outcomes. Transactions that proceed to formal notification without preliminary FIRB consultation face significantly higher conditional approval rates: approximately 64 per cent receive conditions, compared to 23 per cent when informal consultation precedes formal notification.
Comparative frameworks: CFIUS as the global standard
FIRB's assessment approach has converged with the Committee on Foreign Investment in the United States (CFIUS) model, though with material differences in burden of proof. CFIUS operates on a "foreign control" standard and requires establishment of demonstrated national security concern. FIRB, by contrast, applies a broader "national interest" standard with implicit burden on the applicant to demonstrate absence of regulatory concern. This reversal of evidentiary burden meaningfully increases transaction complexity and extends requisite documentation.
Forward guidance for transaction planning
Participants in cross-border resources M&A should anticipate that regulatory assessment now constitutes 20 to 30 per cent of total transaction timeline. For deals involving critical minerals, preliminary FIRB consultation should commence at preliminary bid stage, not post-signing. Structuring decisions should explicitly address workforce, processing, and supply chain strategy, as these factors demonstrably influence regulatory outcomes. Finally, transaction parties should budget for extended timelines: a 120-day regulatory assessment period is now standard for material critical minerals transactions, and contingency planning should account for adverse outcomes or substantial conditional approval.
The resources sector's structural importance to Australian economic and strategic objectives has elevated M&A scrutiny to levels comparable to telecommunications and defence-related acquisitions. Regulatory sophistication is now a prerequisite for transaction success.
