Canada orders three Chinese companies to quit lithium mining

  • China says Canada is breaking trade and market rules
  • Chinese company stocks fall
  • Companies say they don’t expect a major performance hit

OTTAWA/BEIJING, Nov 2 (Reuters) – Canada on Wednesday ordered three Chinese companies to divest their investments in critical Canadian minerals, citing national security.

In response, China accused Ottawa of using national security as a pretext and said the surrender order violated international trade and market rules.

As countries compete to shore up supplies of materials needed for a transition to a cleaner economy, the news sent shares of Chinese companies plummeting on Thursday, despite them saying in stock filings they won’t slump. did not expect a major impact on their performance.

The three people ordered to sell their investments are Sinomine (Hong Kong) Rare Metals Resources Co Ltd, Chengze Lithium International Ltd, also based in Hong Kong, and Zangge Mining Investment (Chengdu) Co Ltd.

The Canadian government ordered the divestment after “rigorous scrutiny” of foreign companies by Canada’s national security and intelligence community, Industry Minister Francois-Philippe Champagne said in a statement.

“As Canada continues to welcome foreign direct investment, we will act decisively when investment threatens our national security and critical mineral supply chains, both at home and abroad,” said Mr. Champagne.

Sinomine was asked to sell its investment in Power Metals Corp (PWM.V), Chengze Lithium was asked to sell its investment in Lithium Chile Inc (LITH.V) and Zangge Mining had to leave Ultra Lithium Inc (ULT.V) .

‘UNREASONABLE’

Chinese Foreign Ministry spokesperson Zhao Lijian said the Canadian government is using national security as a pretext to block normal cooperation between Chinese and Canadian companies and damaging global supply chains.

“China urges Canada to stop unreasonably targeting Chinese companies (in Canada) and provide (them) a fair, impartial and non-discriminatory business environment,” Zhao said at a regular press conference, adding that Beijing would resolutely defend the legitimate rights and interests of Chinese enterprises

Spot lithium prices have risen more than 200% over the past year, due to supply constraints that are expected to persist.

Rystad Energy forecasts that supply of primary lithium minerals will be 8.5% below total lithium demand in 2025, compared to about 10% below demand this year.

“Ottawa’s latest stance underscores global competition for battery-critical minerals in light of the predicted explosion in demand for electric vehicle batteries,” said Susan Zou, principal analyst at Rystad Energy, of the release. Canada’s decision.

Sinomine Resources’ share price fell 7.8% to 86.74 yuan ($11.86) on Thursday, while Chengxin’s share price fell 4% but closed higher by 0.7% to 45.65 yuan. Zangge Mining’s share price fell 3.7% during the day before climbing 1.1% to close at 28.96 yuan.

Last week, Ottawa said it needed to build a resilient critical minerals supply chain with like-minded partners as it set out rules meant to protect the country’s critical minerals sectors from mining companies. foreign states.

“The federal government is committed to working with Canadian businesses to attract foreign direct investment from partners who share our interests and values,” said Mr. Champagne.

Canada has significant deposits of critical minerals such as nickel and cobalt, essential for cleaner energy and other technologies. The demand for minerals is expected to increase over the coming decades.

Earlier this year, countries like Britain, Canada and the United States partnered to secure supplies of critical minerals as global demand increases.

($1 = 7.3163 Chinese yuan renminbi)

Reporting by Ismail Shakil in Ottawa and Siyi Liu in Beijing, additional reporting by Eduardo Baptista in Beijing Editing by Chris Reese, Sandra Maler and Barbara Lewis

Our standards: The Thomson Reuters Trust Principles.

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