The Canadian government is making it harder for foreign state-owned companies to close deals targeting critical minerals in the resource-rich country.
“Significant transactions by foreign state-owned companies in Canada’s critical mineral sectors will only be approved in exceptional cases with a likely net benefit,” Canada’s federal government said in a statement on Friday. Such deals could also give the government “reasonable reason to believe that the investment could harm Canada’s national security,” it said.
Canada and its allies are increasingly concerned about securing critical minerals needed for a range of commodities from electric vehicles to smartphones while pushing back China’s industrial supremacy. US Treasury Secretary Janet Yellen, during a trip to Canada in June, advocated “friend-shoring” to reduce US dependence on China for key materials.
“Canada will act decisively when investments threaten our national security and our critical mineral supply chains,” Industry Minister Francois-Philippe Champagne and Natural Resources Minister Jonathan Wilkinson said in the joint statement.
Canada’s latest rules apply to investments regardless of value, direct or indirect, controlling or non-controlling, and across all stages of the value chain, under the updated policy.
Canada has identified 31 minerals considered critical to the success of Canada and its allies, including the US. Many of these minerals, including what are known as battery metals, are key ingredients in technologies needed for the global shift to electrification and the push away from fossil fuels.
Canada’s government has said the country’s wealth in critical minerals represents a “generational economic opportunity” that will help accelerate the transition to renewable energy.
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