July 15, 2024

Canada Demands Chinese Exit from National Strategic Metals Business

Canada Demands Chinese Exit from National Strategic Metals Business

The Canadian government has required the Chinese shareholders of three small Canadian companies promoting lithium projects to disinvest in these assets.

A few days earlier, Canada approved a new policy on strategic metals mining, according to which only companies from “like-minded” countries can invest in this industry.

Hong Kong-listed Sinomine Rare Metals Resources is required by Canadian authorities to sell its 5.7% stake in Power Metals, Canada, acquired in January 2022, which has a license for a deposit in Ontario containing lithium, tantalum and cesium. Hong Kong Chengze Lithium International in May 2022 acquired a 19.4% stake in Canadian Lithium Chile, which is going to develop a lithium deposit in Chile.

Finally, China’s Zangge Mining, a major producer of lithium and potash fertilizers, bought a 19.4% stake in Vancouver-listed Ultra Lithium in May 2022, and in June signed an agreement with it to invest $40 million in Argentina’s Laguna Verde lithium project. in exchange for a 65% stake in it. The leadership of Ultra Lithium expressed its negative attitude towards government requirements in this regard.

Previously, similar measures were taken against Chinese investors in Australia. The government of this country in April 2022 banned two Chinese companies from buying minority stakes in Australian firms promoting lithium projects in Australia and DR Congo.

The Canadian government says it cannot allow companies controlled by foreign states that do not share Western values ​​to influence the national business of mining strategic metals. These include the so-called “battery” metals lithium, nickel, cobalt and copper, rare earth metals and even aluminum.

Canada’s Industry Minister Francois-Philippe Champagne said the country’s federal government intends to work with Canadian businesses to attract foreign investment only from countries that have similar interests and values.

Canada is part of the so-called Minerals Security Partnership (MSP), founded in June 2022. It also includes Australia, the UK, Germany, the US, Finland, France, Sweden, South Korea, Japan, and the European Commission. It is assumed that the countries included in it will not allow outsiders to the entire chain of mining and production of strategic metals.

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