Canada Blocks Chinese Rare Earths Deal Amid Trudeau-Led Crackdown

18 Jun, 2024

Canada Blocks Chinese Rare Earths Deal Amid Trudeau-Led Crackdown

Canada’s government has intervened to prevent Vital Metals Ltd. from selling its stockpiled rare earth materials to a Chinese buyer. Instead, the Australian firm, which operates a rare earths mine in Canada’s Northwest Territories, will sell these materials to the Saskatchewan Research Council for $3 million. This decision overturns Vital’s initial plan, initiated in December, to sell the same stockpile to China’s Shenghe Resources Holding Co. for $2.4 million, with support from the Canadian federal government.

Vital Metals emphasized the strategic importance of its rare earths mine to Canada’s national prosperity and critical mineral goals. This action is part of a broader Canadian policy aimed at limiting Chinese involvement in its critical minerals sector. Prime Minister Justin Trudeau’s government has signaled a stringent scrutiny of transactions involving Chinese state-linked firms, approving such deals only under exceptional circumstances. Previously, in 2022, three Chinese investors were required to divest their stakes in Canadian lithium firms due to national security concerns.

In a similar vein, Solaris Resources Inc., a Canadian copper miner, recently abandoned a financing arrangement with a Chinese entity following an extensive national security review by the Canadian government. The purchased rare earth materials will support the Saskatchewan Research Council’s rare earths processing facility, aligning with their ongoing acquisitions and agreements with global mineral producers.