May 30, 2024

Chinese Money Can’t Be Solution for Cash-Strapped Canadian Miners, Minister Says

(Bloomberg) — Chinese investment can’t be the solution for cash-strapped Canadian miners seeking financial backing, according to Canada’s natural resources minister.

“We need to be working to solve access to capital issues, but the answer cannot be investment from Chinese state-owned industries,” Natural Resources Minister Jonathan Wilkinson said Tuesday in an interview.

Chinese firms have been pursuing investments in Canadian junior mining companies in recent months, suggesting that tougher federal government rules imposed in 2022 haven’t dissuaded China from delving deeper into the country’s mining sector. Canada and its allies have been discouraging efforts by China to deepen ties in domestic critical minerals companies to counter the Asian nation’s industry dominance.

Read More: China’s Ties to Canada Miners Face Chill in Key Metals Crackdown

Transactions like Zijin Mining Group Co.’s plans to take a 15% stake in Vancouver-based copper company Solaris Resources Inc., announced in January, are testing Canada’s national security rules. China’s Yintai Gold, meanwhile, reached an agreement last month with Osino Resources Corp. to buy the Canadian gold explorer for C$368 million ($271 million).

Canada’s crackdown “may not have totally dissuaded the Chinese, but they will all have to go through a national security review,” Wilkinson said.

Junior graphite explorer SRG Mining Inc. backtracked on plans to secure C$17 million from a Chinese firm for a 19.4% stake in the Montreal-based company on Tuesday, a day after drawing criticism from Canada’s industry minister. Some miners have argued that the Canadian rules constrict access to capital when small mining firms are struggling to raise money.

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