Canada orders three Chinese firms to exit lithium mining

  • China says Canada broke trade and market rules
  • Shares of Chinese companies fall
  • Companies say not expected to have a major impact on performance

OTTAWA/BEIJING, Nov 2 (Reuters) – Canada on Wednesday ordered three Chinese companies to sell their investments in Canada’s critical minerals, citing national security.

In response, China accused Ottawa of using national security as an excuse, saying the disinvestment order violated international commerce and market rules.

As countries compete to ramp up stocks of materials needed to transition to a cleaner economy, the news pushed shares of Chinese companies down on Thursday, though they said in a stock exchange filing that they should have a major impact on their performance. was not expected.

The three that have been ordered to sell their investments include Sinomine (Hong Kong) Rare Metals Resource Co Ltd, Changz Lithium International Ltd based in Hong Kong and Zang Mining Investment (Chengdu) Co Ltd.

Also Read :  'AI-driven technology to solve problems, creates jobs for Nigerians'

Industry Minister François-Philippe Champagne said in a statement that the Canadian government ordered the split following a “rigorous investigation” of foreign firms by Canada’s national security and intelligence community.

“While Canada continues to welcome foreign direct investment, we will act decisively when the investment threatens our national security and our vital mineral supply chains both at home and abroad,” Champagne said.

Sinomine was asked to sell its investment in Power Metals Corp. (PWM.V), Changz Lithium was asked to sell its investment in Lithium Chile Inc. (LITH.V) and Ultra Lithium Inc. (ULT.V). ) required Zang Mining to exit.


Chinese Foreign Ministry spokesman Zhao Lijian said the Canadian government was using national security as an excuse to block normal cooperation between Chinese and Canadian companies and damage global supply chains.

“China urges Canada to stop unfairly targeting Chinese companies (in Canada) and provide (them) a fair, fair and non-discriminatory business environment,” Zhao said at a regular news briefing. interests of Chinese companies

Also Read :  Storm Julia kills 25 in Central America as it churns toward Mexico

Spot lithium prices have risen by more than 200% in the past year, driven by supply constraints that are expected to endure.

Rystad Energy forecasts supply of primary lithium minerals to be 8.5% below total lithium demand by 2025, while demand is down about 10% this year.

“Ottawa’s latest attitude underscores the global competitiveness of critical battery minerals in light of the projected EV battery demand boom,” Susan Xu, a senior analyst at Rystad Energy, said of Canada’s decision.

Share price of Cyanomaine Resources fell 7.8% to 86.74 yuan ($11.86) on Thursday, while Chengxin’s share price fell as much as 4% but ended up 0.7% at 45.65 yuan. Shares of Zang Mining fell 3.7% during the day before closing up 1.1% at 28.96 yuan.

Last week, Ottawa said it should build a resilient critical minerals supply chain with like-minded partners, as it outlines rules to protect the country’s critical mineral sectors from foreign state-owned companies.

Also Read :  Palihapitiya to wind down two SPACs as choppy markets drag valuations

“The federal government is committed to working with Canadian businesses to attract foreign direct investment from partners who share our interests and values,” Champagne said.

Canada has large reserves of important minerals such as nickel and cobalt, needed for clean energy and other technologies. The demand for minerals is projected to increase in the coming decades.

Earlier this year, countries including Britain, Canada and the United States forged a partnership aimed at securing supplies of critical minerals as global demand for them grows.

($1 = 7.3163 Chinese Yuan Renminbi)

Reporting by Ismail Shakeel in Ottawa and Siyi Liu in Beijing Additional reporting by Eduardo Baptista in Beijing Editing by Chris Reese, Sandra Maler and Barbara Lewis

Our Standards: Thomson Reuters Trust Principles.


Leave a Reply

Your email address will not be published.