Canada orders Chinese companies to divest their investments

Canada orders Chinese companies to divest their investments

Canada’s Minister of Innovation, Science and Industry, François-Philippe Champagne, on November 2 ordered three Chinese companies to sell their stakes in Canadian companies in the rare minerals sector. Beijing opposes this decision.

The latter justified his decision on grounds of “national security”. The companies to divest their investments are Sinomine (Hong Kong) Rare Metals Resources Co Ltd, Chengze Lithium International Limited as well as Zangge Mining Investment (Chengdu) Co Ltd, according to a statement.

The decision was made after reviews conducted “thoroughly” by Canadian national security and intelligence agencies, specified the Minister of Innovation, Science and Industry. “Canada will continue to welcome foreign direct investment, but will act decisively on investments that pose a threat to our national security and critical mineral supply chains, both domestically and abroad.”he said.

This announcement is part of the tightening of regulations on investments in rare minerals for foreign state-owned companies. Thus, investments by foreign public companies in “critical minerals” Canadians will be approved that‘”exceptionally”warned Canada.

Ottawa has created a list of 31 so-called minerals “reviews” because they threaten “Canada’s sustainable economic prosperity”which notably includes cobalt, lithium and manganese used in solar panels, wind turbines and electric vehicle batteries.

Read also: Lithium, a new element in the confrontation between China and the United States

Over the past 20 years, China, the world’s largest producer of rare earths, has invested billions of dollars in Canada to ensure a supply of rare metals. Now the country is persona non gratta.

For its part, the Chinese Ministry of Commerce has announced its firm opposition “to Canada’s disruption of regular business cooperation between Chinese and Canadian companies under the guise of national security.”

Canada “must take China’s concerns seriously, stop politicizing economic and trade issues, and create a fair, just, transparent and non-discriminatory business environment for investors from China and other countries,” the ministry spokesperson said in a statement.

China will take necessary measures to safeguard the legitimate rights and interests of Chinese enterprises, the statement said. The ministry pointed out that investment by Chinese companies in Canada’s mining sector is “a commercial activity based on the principles of the market economy and the needs of business development”.

“By generalizing the concept of national security, the Canadian side has artificially erected barriers and violated market rules, harming the commercial interests of relevant Chinese and Canadian enterprises and weakening global investors’ confidence in Canada’s investment environment.” . Canada’s position has harmed its industrial development and the stability of the global mineral supply chain”according to the press release.