Ottawa orders Chinese firms out of critical minerals industry

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Ottawa orders Chinese firms out of critical minerals industry

The Federal Minister for Innovation, Science and Industry, François-Philippe Champagne (archives)

The Canadian government on Wednesday ordered three foreign firms to divest themselves of their investments in Canadian companies active in the critical minerals sector, for reasons of “national security”.

National security reviews have been carried out in a multi-step, thorough and rigorous manner by Canada's national security and intelligence agencies, said the Minister of Innovation, Science and Industry, Francois-Philippe Champagne.

He reported that following these reviews, the Government of Canada ordered three foreign companies to divest their investments in Canadian companies:

  • Sinomine (Hong Kong) Rare Metals Resources Co. Limited to divest of its investment in Power Metals Corp;
  • Chengze Lithium International Limited to divest of its investment in Lithium Chile Inc.;
  • Zangge Mining Investment (Chengdu) Co.Ltd. must divest of its investment in Ultra Lithium Inc.

The Minister clarified that government decisions are based on facts and evidence and taking into account advice from critical mineral specialists, security and intelligence agencies and government experts in the field.

In his statement, Minister Champagne affirmed that Canada will continue to welcome foreign direct investment but will act decisively on investments that pose a threat to our national security and to our critical mineral supply chains, country as well as abroad. He also pointed out that under the Investment Canada Act, certain types of investments are now subject to greater scrutiny.

The Minister's press release also indicates that the federal government is committed to working with Canadian companies to attract foreign direct investment from partners who share our interests and values, but without giving further details.

Furthermore, Mr. Champagne stressed that critical minerals are essential to tomorrow's green and digital economy and added that the government wants to seize this opportunity while making progress towards the country's ambitious climate goals.

Ottawa has created a list of 31 so-called critical minerals which includes cobalt, lithium and manganese used in solar panels, wind turbines and electric vehicle batteries.

During over the past two decades, China, the world's largest producer of rare earths, has invested billions of dollars in Canada to secure a supply of rare metals.

One ​​of the companies named in the minister's statement, Zangge Mining Investment, had signed a partnership with a Canadian company.

On June 20, Ultra Lithium of British Columbia announced an agreement with Zangge Mining Investment for the exploration and development of its Laguna Verde Brine Lithium Project in Argentina.

The Chinese company was to pay US$10 million in installment payments and invest US$40 million in the project.

Ottawa had authorized the acquisition of the Tanco mine in Manitoba by China's Sinomine.

The Manitoba mine produces cesium, an essential mineral for atomic clocks and radiation detectors. In 2022, the Chinese company started the production of lithium in the same mine and sent it to China for the benefit of the national electric vehicle industry.

L& #x27;acquisition of the Canadian company Neo Lithium Corp. by the Chinese company Zijin Mining Group Co. Ltd. was authorized in January by Ottawa.

With information from Globe and Mail, and Agence France-Presse

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