Reviewing deal for embattled TMAC in what one observer calls a ‘mix of security considerations and political considerations’
The federal government says it is reviewing a Chinese mining company’s proposed $207 million buyout of a struggling gold mining company in Nunavut under the Investment Canada Act, as a high-profile case against a Chinese executive in Canada reaches a crucial point.
Shandong Gold Mining Co. Ltd., a Chinese state-owned enterprise that’s listed on the Shanghai Stock Exchange, announced earlier this month it would purchase Toronto-based TMAC Resources Inc., which operates a mine near Cambridge Bay that has been beset by operational challenges.
Ottawa declined to provide any details on why it is scrutinizing the TMAC buyout, but lawyers who practise in this area said the government can easily invoke national security concerns amid rising political tensions with China.
Indeed, on April 18, the government said that as a result of the coronavirus pandemic, it would subject all investments by state-owned enterprises, such as Shandong, to “enhanced scrutiny.”
The review comes amid rising tensions between Canada and China, with the British Columbia Supreme Court expected to release a key decision on Wednesday in the extradition case of telecom giant Huawei Technologies Co., Ltd. executive Meng Wanzhou.