Ottawa has rejected the sale of a Nunavut gold mine to a Chinese state-owned enterprise (SOE), signalling possible new tensions in the Canada-China relationship in the new year.
Officials from TMAC Resources Inc. - who owns the Hope Bay mining property rights and was seeking approval to sell all company shares to China’s Shandong Gold Mining Co. Ltd. - said in a release that federal officials have issued an order prohibiting the sale.
Federal officials had said previously that the transaction had been undergoing national security reviews. Critics have pointed to the fact that a Chinese state-owned facility in Nunavut – which could include port facilities – may be used to support Beijing’s growth ambitions to be a player in the Arctic.
“The Transaction whereby Shandong would acquire 100% of TMAC, as announced on May 8, 2020 and approved by 97% of our shareholders on June 26, 2020, did not receive Canadian regulatory approval and will not proceed,” said TMAC president and CEO Jason Neal in a statement.
“While we are disappointed with the outcome, we are very pleased that TMAC achieved significant operation improvements at Hope Bay. We will continue to build on these improvements while considering options to manage our balance sheet.”
Beijing has issued a response in the form of statements by Ministry of Foreign Affairs spokesman Zhao Lijian, accusing Ottawa of “politicizing normal economic cooperation” in rejecting the Hope Bay acquisition on national security grounds.
“China-Canada economic and trade cooperation is mutually-beneficial in nature,” Zhao said. “The Chinese government always asks Chinese businesses to pursue investment cooperation overseas in compliance with international rules and host country laws... using national security as a pretext for political interference is wrong.
“The Canadian side should provide a fair, open and non-discriminatory market environment for foreign businesses, including Chinese ones, to invest in Canada.”
Ottawa has not commented specifically on the Hope Bay case.