Canada’s natural resources minister has ruled out Chinese investment as a solution for the country’s cash-strapped mining sector, amid rising tensions between the two nations over trade and human rights.
Jonathan Wilkinson said in an interview on Tuesday that Canada needs to find other ways to address the capital challenges faced by its junior mining companies, which are struggling to raise money for exploration and development projects.
“The answer cannot be investment from Chinese state-owned industries,” Wilkinson said, adding that such deals would pose national security risks and undermine Canada’s efforts to diversify its supply chains for critical minerals.
Canada is home to some of the world’s largest reserves of minerals such as cobalt, lithium, nickel and rare earths, which are essential for the production of electric vehicles, renewable energy and advanced technologies.
However, China dominates the global market for these minerals, both as a producer and a consumer, and has been seeking to expand its influence in the sector through investments and acquisitions.
In recent months, Chinese firms have announced plans to buy stakes in Canadian mining companies, such as Zijin Mining Group Co.’s 15% interest in copper company Solaris Resources Inc. and Yintai Gold’s agreement to acquire gold explorer Osino Resources Corp.
These transactions are subject to a national security review by the Canadian government, which tightened its rules on foreign investment in key mineral sectors in 2022, following similar moves by its allies such as the U.S. and Australia.
Some Canadian miners have argued that the new rules restrict their access to capital and limit their growth potential, especially at a time when global demand for green and digital technologies is surging.
But Wilkinson said that Canada is working with its partners to create alternative sources of funding and markets for its critical minerals, as well as to support domestic processing and manufacturing capabilities.
He cited the recent launch of the Canada-U.S. Critical Minerals Action Plan, which aims to enhance bilateral co-operation and trade in the sector, as well as the ongoing negotiations with the European Union on a similar initiative.
He also said that Canada is exploring opportunities to collaborate with other like-minded countries, such as Japan, South Korea and India, to build resilient and sustainable supply chains for critical minerals.
“We have a tremendous opportunity to leverage our natural resource endowment to drive economic growth and create jobs, while also advancing our climate and innovation agendas,” Wilkinson said.
He expressed confidence that Canada’s mining sector will overcome its current challenges and emerge as a global leader in the transition to a low-carbon and digital economy.
Source: Mining.com
