Federal government moves to exclude China from Canada's critical minerals industry | Radio-Canada News

After a national security review, Innovation Minister Francois-Philippe Champagne orders three Chinese resource companies to sell their interests in Canadian critical mineral companies.

Champagne’s order comes less than a week after he said Canada would limit the involvement of foreign state-owned companies in the industry.

Critical minerals and metals, such as lithium, cadmium, nickel and cobalt, are essential components of everything from wind turbines and electric cars to laptops, solar panels and rechargeable batteries.

China is the dominant player in the refining and processing of critical minerals and in the battery cell component manufacturing supply chain.

But China does not produce a lot of minerals and has instead invested heavily in overseas mines in places like Canada to acquire the raw materials it needs.

Canada and its allies are desperately trying to reverse China’s dominance on the ground and create a supply chain that relies on reputedly more stable and reliable partners.

“As Canada continues to welcome foreign direct investment, we will act decisively when investment threatens our national security and critical mineral supply chains, both at home and abroad,” Champagne said. in a written statement late Wednesday.

The Investment Canada Act subjects foreign investments to scrutiny for national security reasons and Champagne said critical mining investments are subject to “thorough scrutiny”.

He said a “multi-step national security review process” by national security and intelligence agencies has concluded that three companies must divest themselves of their stakes in key Canadian mining companies.

The order requires Sinomine (Hong Kong) Rare Metals Resources to sell its investment in Vancouver-based Power Metals Corp., which has exploration projects for lithium, cesium and tantalum in northern Ontario.

Chengze Lithium International Ltd. must divest its interests in Lithium Chile Inc., a company headquartered in Calgary with more than a dozen lithium projects underway in Chile.

And Zangge Mining Investment is ordered to sell its investment in Ultra Lithium Inc., a Vancouver-based resource development company with lithium and gold projects in Canada and Argentina.

Both Canada and the United States have identified dozens of minerals and metals they believe are essential to their future economic success.

They point to the instability created by Europe’s dependence on Russia for oil and gas after the Russian invasion of Ukraine last winter, and growing tensions with China as reasons to ensure that supply chains are mostly in the hands of friends and allies.

In June, U.S. Treasury Secretary Janet Yellen called it “support from friends” during a trip to Ottawa.

“So outsourcing of friends is the idea that countries that espouse a common set of values ​​about international trade, conduct in the global economy, should trade and get the benefits of trade so that we have multiple sources of supply and that we are not overly dependent on critical supply goods from countries where we have geopolitical concerns,” Yellen said.

New rules for critical mining investments announced by Champagne last week mean that investments by public companies will only be approved on an “exceptional” basis and will apply to investments of any size, from small stakes to outright takeovers.

It will affect everything from exploration and development to mining, refining and processing.