Jinteng Mining, a subsidiary of the Chinese mining giant Zijin Mining Group, has initiated a judicial review against the Canadian government. The review challenges Ottawa’s decision to scrutinize the sale of a gold mine in Peru, a transaction that Jinteng secured earlier this year. This legal action underscores the growing tensions between Chinese investments and Canadian regulatory policies, particularly in the critical minerals sector.
Jinteng Mining’s purchase of the gold asset from Pan American Silver Corp in May was a notable transaction, valued at $245 million, with an additional $50 million payment option. This acquisition, however, soon became the focus of a national security review ordered by Canada’s Minister of Innovation, Science, and Industry, François-Philippe Champagne. The review, which has not been independently verified by Reuters, has prompted Jinteng to seek legal recourse through the Canadian judicial system.
The case was officially filed in the Federal Court of Canada in late July. The documents reveal that Jinteng (Singapore) Mining, a key player in Zijin’s global operations, is seeking to overturn the government’s order under Section 18.1 of the Federal Courts Act. This section allows parties affected by federal orders to request a judicial review within 30 days of the decision. The Attorney General of Canada and Minister Champagne are named as respondents in the case, reflecting the high stakes involved.
Legal representation for Jinteng is being handled by Gowling WLG LLP, a prominent law firm with expertise in such complex matters. However, neither Gowling nor the office of Canada’s industry minister has responded to media inquiries regarding the case. This silence has only added to the speculation surrounding the motivations behind the national security review and the potential implications for future Chinese investments in Canada.
The backdrop to this legal battle is a broader geopolitical context. Canada has increasingly adopted a tough stance on investments by state-owned Chinese enterprises, especially in sectors deemed critical to national security. Since 2022, the Canadian government has asked Chinese investors to divest their holdings in Canadian companies that operate in the graphite, lithium, and copper sectors. These minerals, although not always mined within Canadian borders, are considered vital to Canada’s strategic interests, particularly in the context of modern technology and the ongoing energy transition.
Despite these challenges, Chinese investors have continued to pursue opportunities in Canada, particularly in the mining sector. The sale of the gold mine in Peru, while not involving a critical mineral as defined by Canadian law, has nonetheless attracted scrutiny due to its strategic importance. The Canadian government has identified 31 minerals, including copper, lithium, and nickel, as critical for their roles in modern technology, such as electric vehicle batteries. Gold, however, is not included in this list, making the review of this sale somewhat unexpected.
In July, Minister Champagne stated that Canada would maintain a high threshold for approving mergers and acquisitions (M&A) involving critical minerals. He emphasized that any such deals would only be approved under “exceptional circumstances,” reflecting the government’s cautious approach. This policy is part of a broader effort to protect Canada’s interests in an increasingly competitive global market for these vital resources.
The judicial review filed by Jinteng Mining could serve as a test case for how future transactions involving Chinese investments in Canada are handled. The outcome of this case may set a precedent for other companies, both Canadian and international, as they navigate the complex landscape of foreign investment in critical sectors.
Canada’s stance on foreign investment, particularly from state-owned enterprises in China, has been shaped by a combination of economic, security, and geopolitical considerations. The government’s focus on protecting its critical minerals sector is part of a broader strategy to ensure that Canada remains competitive in the global marketplace while safeguarding its national security interests.
The judicial review also raises questions about the balance between welcoming foreign investment and protecting national interests. While Canada has historically been open to foreign capital, the increasing importance of critical minerals in the global economy has prompted a reassessment of this openness, particularly when it comes to investments from state-owned entities.
The case involving Jinteng Mining and the sale of the Peruvian gold mine is emblematic of the challenges that lie ahead. As Canada continues to develop its critical minerals strategy, the outcome of this legal battle could influence how the country manages its relationships with key global players like China.
For Jinteng Mining and its parent company Zijin Mining Group, the stakes are high. A successful judicial review could pave the way for smoother transactions in the future, while a loss could complicate their investment strategies not only in Canada but in other jurisdictions as well. The case also highlights the broader uncertainties facing Chinese companies as they seek to expand their global footprints in an era of heightened scrutiny and protectionism.
