Canada orders three Chinese firms to divest from country’s lithium miners

Lithium battery Source: iStock/kynny

Canada’s government ordered three Chinese firms to divest from a trio of small lithium miners based in the country, days after introducing tougher rules on foreign investments in the nation’s critical minerals sectors.

Sinomine (Hong Kong) Rare Metals Resources Co. Ltd. is required to divest in Vancouver-based Power Metals Corp., while Chengze Lithium International Ltd. must exit from Calgary-based Lithium Chile Inc. and Zangge Mining Investment (Chengdu) Co. Ltd., was ordered to divest from Ultra Lithium Inc., based in Vancouver, Canada’s federal government said Wednesday in a statement.

“These companies were reviewed via the multi-step national security review process, which involves rigorous scrutiny by Canada’s national security and intelligence community,” Canadian Industry Minister Francois-Philippe Champagne said in the statement. “The government’s decisions are based on facts and evidence and on the advice of critical minerals subject matter experts, Canada’s security and intelligence community, and other government partners.”

The move follows updated guidelines from Canada’s government, released Friday, which make it harder for foreign state-owned companies to pursue deals and investments that target critical minerals including lithium, nickel, copper and uranium in the resource-rich country. Transactions by foreign state-owned firms will now only be approved “on an exceptional basis,” Friday’s statement said. 

Sinomine Resource and Zangge Mining said the matter won’t have big impacts on their performance in 2022 and beyond respectively, according to separate filings to Shenzhen stock exchange Thursday. 

Meanwhile, Beijing urged Ottawa to stop “unreasonable suppression” of Chinese enterprises and said Canada’s practice will hurt the stability of the supply chain, state broadcaster CCTV reported, citing Foreign Ministry spokesman Zhao Lijian at a briefing.

© 2022 Bloomberg L.P.

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