TORONTO - Canada will not force Chinese state-investors in three of its large mining companies to divest stakes, as such a move would create policy uncertainty, Natural Resources Minister told Reuters.

In November, Canada had asked three Chinese companies to sell their stakes in Toronto-listed lithium explorers following a national security review, drawing criticism from the mining industry and raising questions about the future of other Chinese investments in Canadian mining sector.

"If you start looking backwards at investments, it will create all kinds of uncertainty about whether an investment is ever really an investment," Natural Resources Minister Jonathan Wilkinson said in an interview late on Tuesday on the sidelines of Prospectors and Developers Association of Canada (PDAC) conference in Toronto.

Three of Canada's largest mining companies - Teck Resources, Ivanhoe Mines and First Quantum Minerals - count Chinese state-owned enterprises as their biggest single shareholder.

This is the first time Canadian government officials have clarified what the future holds for other Chinese investments in the three Canadian mining companies.

According to Refinitiv data, the sovereign wealth fund China Investment Corp owns 10.3% stake in Teck, China's state-owned CITIC Metal Group owns 26% in Ivanhoe Mines while China's largest copper producer Jiangxi Copper Corp Ltd owns 18.3% in First Quantum Minerals.

Canada's move late last year had worried smaller mining companies in the country who are looking to raise funds for exploration of critical metals.

Wilkinson added that Canada remains concerned over Chinese state-owned enterprises having "control" of Canadian mining companies through mechanisms such as long-term off take agreements, where buyers secure exclusive long-term supply of metals at certain price.

Canada and its allies are looking to decouple from China in an attempt to diversify their supply chain in battery metals.

In spring this year, Canada will introduce a revamped Investment Canada Act that will reject or impose conditions on foreign investments that the government considers a threat to its national security.

But Wilkinson clarified that Canada will continue to trade with China. "Of course Canada will continue to have trade with China, some of that may involve trade in critical minerals."