Canadian Prime Minister Justin Trudeau’s administration has blocked a plan by a Chinese company to purchase a gold mine project in the Canadian Arctic region of Nunavut over national security concerns.
The Hope Bay gold mine in Nunavut has been owned by Toronto-based company TMAC Resources Inc since 2012. Estimates suggest that the area’s gold deposits, first discovered more than three decades ago, could produce nearly 150,000 kgs of gold, and TMAC has spent more than $450 million into developing the property. On May 8, the company announced that China’s Shandong Gold Mining Co, an acquisitive state-backed metal producer, had agreed to buy the firm for about $230 million. Soon after, in October, TMAC received notice that the central government had ordered a national security review of the deal under the Investment Canada Act.
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On Monday, the company said that the proposal “did not receive Canadian regulatory approval” and that it would not proceed. Shandong confirmed the news the next day, saying that the decision was made for the “purpose of safeguarding national security”.
The move comes amid increasingly strained ties between Ottawa and Beijing over the 2018 arrest of Huawei chief financial officer Meng Wanzhou in Vancouver on a US extradition warrant. China has also imprisoned two Canadian citizens since then on charges of espionage, though their arrest has widely been perceived as retribution, with Canada accusing the country of engaging in “hostage diplomacy”. Bilateral ties have been tense over the past two years, with the countries engaging in trade spats, and employing harsh rhetoric against each other’s policy approaches. With regards to the Artic specifically, Chinese infrastructure investments in the region are also being watched closely by Ottawa and other Arctic nations.
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Chinese Foreign Ministry spokesman Zhao Lijian said Wednesday that Canada “should provide an open and nondiscriminatory business environment for all companies operating in Canada, including the Chinese ones.”
While Ottawa has not publicly addressed the matter due to confidentiality concerns, a spokesperson for Innovation, Science and Economic Development Canada — the federal department responsible for the Investment Canada Act — assured CBC that the national security review was a standard process for all foreign investments in Canada, and was conducted on a case-by-case basis as part of a “rigorous and evidence-based process.”
Meanwhile, Canada’s Minister of Northern Affairs, Dan Vandal, said in a tweet: “Our government recognizes the importance of the mining industry to the economic prosperity of the North. We will continue to build a prosperous future for Northerners through the ANPF [Arctic and Northern Policy Framework] where decisions are made by the North for the North.”