In response to a crackdown on Chinese investment in Canada’s critical mineral industry, major miners are deciding to drop the “Canada” part of their business.
What happened: According to The Globe and Mail, Canadian miner SRG Mining plans to relocate to the United Arab Emirates, a move the company said will stop a national security review that could have put the brakes on its financing deal with a Chinese energy firm.
Catch-up: In 2022, the federal government ordered several companies to sell off their Chinese stakes and effectively banned Canadian miners from being acquired by Chinese buyers, citing national security concerns over the country’s dominance in critical minerals.
- Chinese companies are throwing caution to the wind, moving forward with several new investments anyway, including one firm buying a 15% stake in miner Solaris Resources.
- Last month, the Vancouver copper miner announced an agreement to sell the stake to Chinese resource giant Zijin for $130 million, but the deal is still pending a national security review.
Why it matters: Experts say that SRG’s move could trigger a domino effect of critical mineral companies leaving Canada to avoid the restrictions on Chinese financing. That would be a less-than-ideal development for Canada, which has been pitching its mining industry as a solution for Western allies who are looking to cut their reliance on China.
Bottom line: The federal government has to balance limiting Chinese influence without scaring away the industry’s heavy hitters. The decision to approve — or block — Solaris Resources’ sale will be a major indicator of whether the tough-on-China stance is softening.—LA