Questions linger a year after Canada placed curbs on foreign companies to protect critical minerals – by Naimul Karim (Financial Post – September 24, 2023)

Industry uncertainty remains with Ottawa’s divestment orders dominating discussions in the mining world over the past year

Canada shocked its mining sector a year ago with a policy that changed the way the industry viewed investment opportunities from foreign businesses. The policy, released in October, made it more difficult for foreign businesses, either owned or influenced by “non-like-minded” nations, to own or take a stake in Canada’s critical minerals sector, saying that such a situation could be considered “injurious to national security” under the Investment Canada Act (ICA) and, therefore, trigger an extended government review.

Canada considers 31 minerals, including lithium and copper, as critical due to the key roles they are expected to play in the gradual transition away from energy produced from fossil fuels.

A few days after the policy was released, Ottawa ordered three Chinese companies to divest their shares from three Canadian lithium companies. Back then, some analysts described the move as part of an overarching plan by the United States and Canada to redesign their supply chains to lessen their reliance on China, which dominates the global critical minerals sector.

The U.S. passed the Inflation Reduction Act last year, which includes several tax benefits for businesses such as a tax credit of up to US$7,000 for electric vehicles made primarily in North America or its allies.

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