Exclusive: Chinese firms pull out of Canadian miners despite report of Ottawa changing stance
Published: Mar 09, 2023 10:32 PM
China, Canada Photo: VCG

China, Canada Photo: VCG

One of the three Chinese mining companies that were asked by the Canadian government to sell their stakes in Toronto-listed lithium companies told the Global Times on Thursday that it has already sold its stake, while another said it was preparing to unload its stake as well. Both companies said they would use caution in future investment in Canada given the risks. 

The remarks came after Canadian Minister of Natural Resources Jonathan Wilkinson told Reuters that the country "will not force Chinese state-investors in three of its large mining companies to divest stakes, as such a move would create policy uncertainty."

Canada's federal government said in November last year that it had asked Sinomine (Hong Kong) Rare Metals Resources Co, Chengze Lithium International and Zangge Mining Investment (Chengdu) Co to divest their stakes in three separate lithium miners, citing national security concerns.

The Chinese companies insisted that their investments were in compliance with Canadian regulations and asked for an explanation from the Canadian side over the decision.

When reached by the Global Times on Thursday regarding the latest remarks by Wilkinson, an employee of Shenzhen Chengxin Lithium Group, the parent company of Chengze Lithium International, said that they were not aware of the remarks by the Canadian minister, but they have already sold their stake to another Canada-based company.

The person said the case has had no big impact on the company's global business.

An employee with another of the three Chinese companies said on condition of anonymity on Thursday that they have not received any notice regarding the change of tone from the Canadian side over the matter. "We are preparing to sell the stake," she said, adding that it is only a small part of the company's global business.

Despite the fresh remarks by the Canadian minister, the companies have reservations about future investments in Canada, given what they have been through over this case.

"We will take the risks into consideration [for future investment decisions]," said the employee with Shenzhen Chengxin Lithium Group.

As for whether to invest and cooperate with Canadian companies, the employee with the other company said that "it depends on the actual situation… but there are many uncertainties in the Canadian market at the moment."

While the Canadian minister has made some positive remarks, it is still far from enough, He Weiwen, an executive council member of the China Society for World Trade Organization Studies, told the Global Times on Thursday. He urged the Canadian side to provide transparent, reliable, fair and law-based national treatment and a negative list for international investors.

Previously, the Chinese Foreign Ministry urged Canada to stop unreasonable suppression of Chinese companies and provide a fair, just and non-discriminatory business environment for Chinese companies to continue normal operations.

China's Ministry of Commerce also emphasized that China firmly opposes Canada's behavior of interfering with and blocking normal business cooperation between Chinese and Canadian companies in the name of national security.