China’s ambassador to Canada, Cong Peiwu, has said that his country will continue to do business in Canada’s critical minerals sector despite increased scrutiny placed on Chinese investments.
Last week, the Canadian Government signalled its concern about Chinese control of its critical mineral supplies. Ottawa will now consider how to handle offtake agreements that function as loans or investments by China in Canadian mining companies.
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Reacting to the measures, Cong said the Trudeau administration is “wrong” to prevent Chinese investors from buying majority stakes in domestic mining companies. Speaking to Bloomberg, Cong said: “Politicising normal commercial cooperation and using national security as a pretext for political interference is wrong. China has expressed firm opposition to this. We will continue to do business on the basis of mutual respect and mutual benefit.”
The move comes on the back of Prime Minister Justin Trudeau announcing his intention to limit Chinese investment more than a year ago. Prior to this, in 2022, his administration forced Chinese investors to withdraw from three lithium companies under the critical mineral divestment strategy.
Nevertheless, several Chinese holdings have been acquired this year. Zijin Mining Group set in motion plans to buy a 15% stake in Canadian copper miner Solaris Resources; Ganfeng Lithium aimed to acquire a 15% stake in Lithium Americas Argentina; and Yintai Gold bought gold explorer Osino Resources for C$368m ($271m).
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As domestic funding drained due to low commodity prices, Canada’s junior mining companies have been lured with favourable terms offered by Chinese investors.
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By GlobalDataCritical minerals such as lithium, copper, nickel and cobalt have important applications in the production of electric vehicles, solar panels and wind turbines. China currently holds a dominant position in the supply chains of these minerals.
Speaking at the Resourcing Tomorrow Mining conference in London last year, Michal Meidan, director at the Oxford Institute for Energy Studies, said that China has “80–100% control of some processing supply chains” of critical minerals.
