The Australian government is rattling the sabre of protectionism today as it signalled that it will not welcome overseas investors who want to take control of the country's mining assets.

In a thinly veiled “hands off” warning to Chinese raiders, Australia's Foreign Investment Review Board (FIRB) says it wants to limit investment in its major mining companies to a maximum of 15%.

For start-up mining projects relying on investors who are prepared to risk losing their money, the FIRB says it is prepared to allow a larger stake but that it must be limited to less than 50%.

The issue has blown up after state-owned China Nonferrous Metal Mining attempted to take control of Lynas Corporation, although it subsequently walked away from the bid.

The takeover attempt has become a cause célèbre because Lynas is a miner of so-called rare earth metals — the “green” lanthanide metals used in hybrid cars, wind turbines and super-efficient light bulbs as well as in iPods and radar systems.

Around 95% of the world's rare earth metals are already controlled by China and Chinese entities.