On Wednesday, Canada’s Industry Minister François-Philippe Champagne said three Chinese companies would be asked to divest from small mining companies. “While Canada continues to welcome foreign direct investment, we will act decisively when investment threatens our national security and our critical mineral supply chains, both at home and abroad,” Champagne said in a written statement. The order comes after a “multiple” review by Canada’s national security and intelligence agencies, which decided the three companies must leave the Canadian mining industry for national security reasons. Critical minerals and metals include lithium, cadmium, nickel and cobalt. They are essential for clean energy technologies, including turbines and electric cars and solar panels. They are also an essential part of laptops and rechargeable batteries. In recent years, China has become the largest refiner and processor of critical minerals, building an extensive supply chain that relies on overseas mines for raw materials. Canada has extensive, largely undeveloped deposits of nickel and cobalt, and Chinese companies have made up a growing share of foreign investment in the industry. Earlier this year, Canadian miner Neo Lithium Corp was acquired by Chinese state-controlled Zijin Mining Group Co, a move that led to parliamentary hearings on potential national security threats posed by China’s increased investment. According to Champagne’s directive, Sinomine (Hong Kong) Rare Metals Resources Co Ltd, Chengze Lithium International Ltd and Zangge Mining Investment (Chengdu) Co Ltd must sell their stakes to Power Metals Corp, Lithium Chile Inc and Ultra Lithium Inc. The move comes a week after Ottawa tightened rules on foreign investment in the critical minerals sector. Champaign said investments by state-owned companies would only be approved on an “exceptional basis” and would apply not only to takeovers, but also to small investments. Amid concerns about China’s growing dominance, nations have come together. Earlier this year, countries including Britain, Canada, the US and Australia formed a global partnership to secure access to critical minerals. Relations between China and Canada have remained strained since the arrests of Huawei executive Meng Wenzhou and Canadian businessmen Michael Kovrig and Michael Spavor in 2018. Recent reports that China operates secret police stations inside Canada, prompting a federal police investigation further chill relationships. China pushed back on Thursday, calling Canada’s move a breach of cooperation between the two nations and an attempt to damage global supply chains. “China urges Canada to stop unreasonable targeting of Chinese companies [in Canada] and provide [the companies] with a fair, impartial and impartial business environment,” Chinese Foreign Ministry spokesman Zhao Lijian told reporters, adding that Beijing would defend the rights and interests of Chinese companies on board.
