Canada extends review of Chinese state firm’s Arctic gold mine bid
- Shandong Gold Mining will need to wait at least another 45 days to know the fate of its proposed purchase of TMAC Resources
- If approved, sale would give Chinese company access to operations in Canada’s strategic far north
Canada has extended a national security review of a US$165 million Chinese takeover of a Canadian gold mining company operating in the country’s strategic far north.
TMAC Resources said on Friday that a federal review of state-owned Shandong Gold Mining’s takeover bid for the struggling miner had been extended for another 45 days.
TMAC offered no explanation for the extension.
If approved, the deal would give Shandong Gold Mining, China’s second-biggest gold producer, full control over TMAC’s sole asset, the Hope Bay gold project.
No clear end to China-Canada relations slide which began with arrest of Huawei’s Meng Wanzhou
Located in Nunavut in Canada’s far north, Hope Bay not only has a wealth of gold deposits, it is also on the Northwest Passage, a sea route linking the Atlantic and Pacific oceans via the Arctic.
Although the route remains frozen and impassable for most of the year, some scientists say climate change will soon open up the passage for longer periods – potentially opening a much shorter shipping route between Asia and Europe.
The area’s strategic value and untapped potential prompted some members of Canada’s opposition and former government officials to call for Prime Minister Justin Trudeau to block the sale, according to Canadian media reports.
Meng Wanzhou case: arresting Huawei exec on plane would have been too risky, Canadian officer tells court
The Investment Canada Act requires the government to review any acquisition by a state-owned enterprise and allows authorities to block any deal that could threaten the country’s national security.
Two other Chinese state-owned companies, MMG and Jilin Jien Nickel Industry, already own assets in Canada’s Arctic territories. MMG owns zinc and copper deposits and Jilin Jien operates a mine.
While Nunavut encompasses an area larger than France, it is sparsely populated and lacks infrastructure.
China urged to release Canadian Michael Kovrig at UN Security Council meeting
The review comes as relations between Canada and China are at an all-time low, with the ongoing extradition case in Canada against Huawei Technologies chief financial officer Meng Wanzhou and the detention in China of Canadian citizens Michael Kovrig and Michael Spavor.
The detentions have soured Canadian perceptions of China, putting pressure on Trudeau’s government to get tough on Beijing.
According to a poll by Nanos Research in July, 53 per cent of Canadians surveyed said the government should pursue a more aggressive approach to force China to release the two Canadians.
This includes blocking Chinese companies from buying Canadian firms and denying entry to Chinese government officials and their families from living or studying in Canada, according to Nanos Research.
