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China to invest in Canada mining despite crackdown, envoy says

Ambassador Cong Peiwu

Ambassador Cong Peiwu

15th March 2024

By: Bloomberg

  

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China’s ambassador says the country will continue to do business in Canada’s domestic critical minerals sector despite Prime Minister Justin Trudeau’s “unfortunate” crackdown on foreign investment.

Ambassador Cong Peiwu said the Canadian government is “wrong” to prevent Chinese investors from buying majority stakes in domestic mining companies, like it did in 2022 when it forced three Chinese state-owned firms to divest from a trio of lithium companies.

“Politicizing normal commercial cooperation and using national security as a pretext for political interference is wrong. China has expressed firm opposition to this,” said Cong in an interview with Bloomberg News on Wednesday.

“We’ll continue to do business on the basis of mutual respect and mutual benefit.”

The comments follow remarks by Canada’s Natural Resources Minister Jonathan Wilkinson last week warning miners that Chinese stakes will face strict national security reviews.

Chinese investment has continued to flow through Canada’s mining sector more than a year after Trudeau moved to tighten its foreign ownership rules. This year alone, Zijin Mining Group initiated plans to buy a 15% stake in Canadian copper company Solaris Resources, Ganfeng Lithium Group Co moved to take a 15% stake in Vancouver-based Lithium Americas Argentina and Yintai Gold agreed to buy gold explorer Osino Resources for C$368-million.

Canadian government officials, speaking on condition they weren’t named, have told Bloomberg they are tracking the issue closely and are considering whether further measures are needed beyond the current national security review regime.

While Wilkinson warned that recent transactions will be subject to rigorous reviews, Cong urged Canada’s government to “respect market laws, rather than shouting slogans against China and waging these wrong-placed accusations against China by over-stretching the concept of national security.”

China has found an ally in Canada’s cash-strapped junior mining firms, some of which have called on Ottawa to relax tougher rules on Chinese investment while the sector struggles to raise capital while commodity prices are low.

Cong said China’s investments provide much-needed funding to those firms at a time when metals have become an essential ingredient to the global transition away from fossil fuels. Minerals including lithium, copper, nickel and cobalt are key components of electric vehicles, solar panels and wind turbines, though countries like Canada and the US have pushed to build a domestic supply chain to reduce China’s dominance in the global mining industry.

“Critical mining is about those materials to be used in sectors like new-energy vehicles,” said Cong. “That’s good for the whole world. We’re talking about coping with climate change.”

Edited by Bloomberg

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