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, as well as in the battery cell component manufacturing supply chain. But China doesn’t produce much of the mineral, and instead has invested heavily in overseas mines in places like Canada to get the raw materials it needs. Canada and its allies are desperately trying to reverse China’s dominance in the sector and build a supply chain based on what are seen as more stable and reliable partners. An electric vehicle is charged in Ottawa in July. Making EV batteries requires certain so-called critical minerals, few of which are found in North America. (Sean Kilpatrick/The Canadian Press) “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 late Wednesday. Investment Canada’s law subjects foreign investments to national security review, and Champagne said critical mineral investments are subject to “enhanced scrutiny.” He said a “multi-step national security review process” by national security and intelligence agencies concluded that three companies should divest their stakes in Canadian vital minerals companies. The order requires Sinomine (Hong Kong) Rare Metals Resources to sell its investment in Power Metals Corp. based in Vancouver, which has lithium, cesium and tantalum exploration projects in northern Ontario. Chengze Lithium International Ltd. is being asked to divest its interests in Lithium Chile Inc., a Calgary-based company with more than a dozen lithium projects under development in Chile. And Zangge Mining Investment is being ordered to sell its investment in Ultra Lithium Inc., a Vancouver-based resource developer with lithium and gold projects in both Canada and Argentina. Canada and the US have identified dozens of minerals and metals that they consider essential to their future economic success. They point to the instability created by Europe’s reliance on Russia for oil and gas following Russia’s invasion of Ukraine last winter and rising tensions with China as reasons to ensure supply chains are mostly in the hands of friends and allies . In June, US Treasury Secretary Janet Yellen called it a “clash of friends” during a trip to Ottawa. “So the idea is that countries that adopt a common set of values for international trade, behavior in the global economy, should trade and take advantage of the benefits of trade so that we have multiple sources of supply and not be overly reliant in sourcing critical goods from countries where we have geopolitical concerns,” Yellen said. New rules for vital minerals investment announced by Champagne last week mean that investments by state-owned 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.
