The Canadian Government has issued a decree to three Chinese state-owned firms to divest their investments in Canadian critical minerals companies in the wake of national security.

According to the order, Sinomine (Hong Kong) Rare Metals Resources is required to exit Power Metals , Chengze Lithium International to pull out from Lithium Chile , and Zangge Mining Investment to divest its investment from Ultra Lithium.

Canada Minister of Innovation, Science and Industry François-Philippe Champagne said: “While Canada continues to welcome foreign direct investment, we will act decisively when investments threaten our national security and our critical minerals supply chains, both at home and abroad.

“In accordance with the Investment Canada Act (ICA), foreign investments are subject to review for national security concerns, and certain types of investment – such as those in the critical minerals sectors – receive enhanced scrutiny.”

The latest decision follows a review of several investments in Canadian companies, which are engaged in the critical minerals sector, including lithium.

Champagne added: “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.”

In response to Canada’s decision, Chinese foreign ministry spokesperson Zhao Lijian was cited by Reuters as saying that Canada is blocking cooperation between the companies of the two countries by using national security as a pretext.

Zhao was quoted by the news agency as saying in a regular news briefing: “China urges Canada to stop the unreasonably targeting of Chinese companies (in Canada) and provide (them) with a fair, impartial and non-discriminatory business environment.”

He noted that China would defend the Chinese companies’ legitimate rights and interests.