Canada’s government is making it harder for foreign State-owned companies to pursue deals that target critical minerals in the resource-rich country.
“Significant transactions by foreign state-owned enterprises from Canada’s critical minerals sectors will only be approved as of likely net benefit on an exceptional basis,” Canada’s federal government said Friday in a statement. Such deals could also give the government “reasonable grounds to believe that the investment could be injurious to Canada’s national security”, it said.
Canada and its allies have become increasingly concerned about securing critical minerals needed for a range of goods, from electric vehicles to smartphones, while pushing back on China’s industry dominance. US Treasury Secretary Janet Yellen advocated for “friend-shoring” during a June trip to Canada as a means of reducing American dependence on China for key materials.
“Canada will act decisively when investments threaten our national security and our critical minerals supply chains,” Industry Minister Francois-Philippe Champagne and Natural Resources Minister Jonathan Wilkinson said in the joint statement.
Canada’s latest rules apply to investments regardless of value, whether direct or indirect, controlling or non-controlling and across all stages of the value chain, according to the policy update.
Canada has identified 31 minerals deemed critical to the success of Canada and its allies, including the US. Many of those minerals, including so-called battery metals, are key ingredients for technologies needed in the global shift toward electrification and a push to wean off fossil fuels.
Canada’s government has said that the country’s abundance of critical minerals represents a “generational economic opportunity” that will help accelerate the transition to renewable energy.