Ottawa cracks down on foreign state-owned investments into Canadian critical minerals industry after facing criticism it went too easy on China – by Niall McGee (Globe and Mail – October 29, 2022)

The federal government is tightening the rules to make it considerably harder for foreign state-owned firms to invest in Canadian critical-minerals companies, after it faced harsh criticism earlier this year for allowing too much Chinese investment into domestic resource firms.

Effective immediately, transactions involving investments by state-owned firms into Canadian critical-minerals companies will only be approved on an “exceptional basis,” the government of Canada said in a release.

The rules will apply not just to outright takeovers of Canadian companies, but investments of any size, including smaller non-controlling stakes across every facet of the resource industry, from exploration and development to mining and refining.

Previously, the language around the approval process was less stern, and the rules were largely focused on outright takeovers. The last time Ottawa tightened the rules, in March, 2021, it said acquisitions of Canadian companies by state-owned firms would be subject to “enhanced scrutiny.” The government also said it would start looking at whether such transactions harm Canada’s supply of critical minerals.

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