Canada’s Minister of Innovation, Science and Industry, the Honourable François-Philippe Champagne, discussed the government’s recent decision on investments in Canadian critical minerals companies.
“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. “In accordance with the Investment Canada Act, foreign investments are subject to review for national security concerns, and certain types of investment—such as those in the critical minerals sectors—receive enhanced scrutiny.”
Based on a review of a number of investments in Canadian companies engaged in the critical minerals sector, including lithium, the Canadian government ordered Chinese investors to divest from three Canadian companies, specifically:
- Sinomine (Hong Kong) Rare Metals Resources Co., Ltd. is required to divest itself of its investment in Power Metals Corp.
- Chengze Lithium International Ltd. is required to divest itself of its investment in Lithium Chile Inc.
- Zangge Mining Investment (Chengdu) Co., Ltd. is required to divest itself of its investment in Ultra Lithium Inc.
Calgary-based Lithium Chile owns the largest high-grade lithium reserves in the world, 79,900 hectares in Chile and 23,300 hectares in Argentina. The company received a $27.9 million private placement from Chengxin Lithium Group, the world’s largest lithium processor, earlier this year. Vancouver-based Ultra Lithium Inc. is an exploration and development company with lithium properties in Ontario, the U.S. and Argentina. Earlier this year, Zangge paid $10 million to Ultra Lithium and invested another $40 million for a 65% stake in Ultra Argentina S.R.L., a subsidiary of Ultra Lithium that holds the Laguna Verde property in Argentina. Sinomine recently entered an offtake agreement with Vancouver-based Power Metals for all lithium, cesium and tantalum produced from the company’s Case Lake Property. Case Lake is a spodumene pegmatite swarm located in northeastern Ontario.
The Canadian government’s decision comes as it finalizes its Critical Minerals Strategy, which will “position Canada as the global supplier of choice for critical minerals.”
