https://www.theglobeandmail.com/
A Canadian miner is proposing moving its headquarters outside of Canada in an attempt to skirt a national security review that would have allowed the federal government to block its financing deal with an opaque China-based critical minerals company.
Montreal-based SRG Mining Inc. in July announced a tentative deal worth $16.9-million to sell a 19.4-per-cent stake to Carbon ONE New Energy Group Co. Ltd. (C-ONE), even though Ottawa last year announced a virtual ban on the acquisition of Canadian mining companies by China-based enterprises, because of national security concerns over the superpower’s dominance in critical minerals.
At the time SRG announced its deal, it warned investors that the transaction was subject to approval by the federal government. But in a public filing last week, SRG laid out a workaround that it says will remove Canada’s power to police the transaction. The company will maintain its TSX Venture Exchange listing, but redomicile outside the country. Consequently, the C-ONE deal will no longer need Ottawa’s approval, SRG said.
Christopher Ecclestone, principal and mining strategist with London-based Hallgarten & Co., said SRG’s proposed workaround makes a “total mockery” out of Canada’s national security policy. If this transaction goes through, it will open up a “Pandora’s box”, he said, that will trigger a rush of companies redomiciling outside of Canada so they can avoid restrictions under the Investment Canada Act (ICA) and retain the option to raise money from, or sell to, a China-based buyer.
For the rest of this article: https://www.theglobeandmail.com/business/article-canada-critical-minerals-china-investment/