November 10, 2022: Canada has ordered Chinese companies to divest their holdings in three Canadian-listed junior mining companies planning to develop lithium deposits, in a bid to safeguard critical battery material supplies for the domestic market.
Industry innovation and science minister François-Philippe Champagne (pictured) said on November 2: “While Canada continues to welcome foreign direct investment, we will act decisively when investments threaten our national security and our critical minerals supply chains, both at home and abroad.”
Champagne said the decision had been taken under the Investment Canada Act following a review, supported by the nation’s intelligence services, into Canadian firms engaged in the critical minerals sector, including lithium.
As a result of that process, the government has ordered Sinomine (Hong Kong) Rare Metals Resources to divest itself of its investment in Power Metals Corp, which is exploring and developing caesium, lithium and tantalum assets in Canada.
Chengze Lithium International must divest itself of its investment in Lithium Chile, which is developing projects in Argentina and Chile.
Zangge Mining Investment (Chengdu) is also required to divest itself of investment in Ultra Lithium — a publicly-traded Canadian mineral exploration company focused on advanced lithium and gold projects in Argentina, Canada and the US.
Champagne said the decision coincided with the finalization of the government’s critical minerals strategy.
“Canada’s critical minerals are key to the future prosperity of our country,” he said.
“Increasing demand for these all-important minerals are presenting Canada with a generational economic opportunity. The federal government is determined to work with Canadian businesses to attract foreign direct investments from partners that share our interests and values.
Power Metals chairman and CEO Johnathan More said on November 3: “While we are surprised by Canada’s stance towards Chinese investment into Canada’s critical minerals industry, it clearly shows that they see the opportunity and assets of Power Metals as too valuable for such foreign investment.”
More said Sinomine will respond to the Canadian government shortly as they look at the appeal process.
Ultra Lithium said the announcement had been detrimental to its many Canadian shareholders and the company was “assessing its legal and other options to preserve value” for shareholders.
BESB reported on March 3 that a new era of energy storage and electric vehicles in the US risks stalling before it even begins because of potential shortages of lithium and other critical material supplies.