Raw Rare Earth ore waiting to be processed at Vital Metals in Saskatoon, Saskatchewan, January 16, 2023. (REUTERS/Nayan Sthankiya/File Photo)
By Andrew Chen
Conservative MPs are calling for a national security review of a Chinese company’s plan to acquire substantial shares in Vital Metals, a Canadian rare earth mining company. This move follows a recent government directive to exclude three Chinese firms from the Canadian critical mineral industry.
On Dec. 8, Conservative MPs Rick Perkins, shadow minister for innovation, and Shuvaloy Majumdar issued a joint statement on the platform X, urging the innovation minister to leverage his powers and launch a review of the proposed acquisition of Vital Metals shares by Shenghe Resources, a Chinese company partially owned by the Chinese state.
“China’s acquisition are once again threatening Canada’s economic security,” reads the statement.
“Conservatives demand that the Minister of Innovation, Science, Industry invoke the powers of the Investment Canada Act under section 25.3 immediately to review this deal to the maximum allowable timeline so we can protect Canadian resources and jobs from the control of the Chinese Communist Party [CCP].”
This provision enables the review of investments if, following consultation with the public safety minister, the innovation minister deems it a potential threat to Canada’s national security.
The Epoch Times reached out to Innovation Minister François-Philippe Champagne and his department for comment, but didn’t hear back by publication time.
Vital Metals, headquartered in Australia, claims to be Canada’s first rare earth mining company. It has mining projects at Nechalacho in Northwest Territories and at Wigu Hill, Tanzania.
On Oct. 23, Shenghe announced its plan to enter into a subscription agreement with Vital Metals, aiming to acquire up to 18.2 percent of all issued shares of Vital Metals.
This acquisition would be executed in two phases. In the initial phase, Shenghe is set to acquire 9.99 percent of Vital Metals’ issued share capital, which totals approximately AUD$5.9 million (roughly $5.27 million).
In the second phase, subject to Vital Metals shareholder approval, Shenghe can subscribe to an additional 8.2 percent of the total issued shares, resulting in a total subscription amount of approximately AUD$8.9 million (roughly $7.96 million).
In early November, Mr. Champagne ordered three Chinese resource companies to sell their interests in Canadian critical mineral firms, after he pledged to limit the involvement of foreign state-owned companies in the industry over concerns about national security threats.
China dominates critical minerals processing and battery cell component manufacturing supply chains. Although not a major producer, it heavily invests in overseas mines, like in Canada, to secure raw materials.
Mr. Perkins highlighted that the Chinese regime holds 14 percent of Shenghe shares. As of the latest October data from Finance Sina, a research institute operated by China Geological Survey, a Chinese state-owned non-profit, holds 14.06 percent of Shenghe shares.
Mr. Majumdar also raised concerns about the CCP’s involvement in Canadian resource development.
“A compromised supply chain will deter investment in Canada and impede our ability to act on existing investments made to secure a resilient, Canadian-run supply chain.”The MP further criticized the Liberal government for greenlighting the purchase of Neo Lithium, a Toronto-listed lithium mining company, by the Chinese state-owned firm Zijin Mining Group in early 2022. This approval also faced opposition from U.S. lawmakers Michael Walz (R-Fla.), Elise Stefanik (R-N.Y.), and Lance Gooden (R-Texas), who raised concern in a letter to several U.S. cabinet secretaries.