Canada ‘wrong’ to reject $230M Arctic mine takeover by Chinese enterprise, China’s embassy says

OTTAWA — Associates of the Chinese government say Canada was “wrong” to reject the proposed takeover of an Arctic gold mine by a point out-owned firm, the most recent jab in an now-fraught partnership concerning the two nations around the world.



a group of people on a beach: TMAC Resources’ Hope Bay, Nunavut property.


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TMAC Resources’ Hope Bay, Nunavut property.

Canada on Tuesday rejected the proposed takeover of Toronto-primarily based TMAC Assets Inc. by China’s Shandong Gold Mining Co. Ltd., citing national stability considerations. Underneath the deal, Shandong would have compensated $230 million not like financial debt to acquire the Canadian organization, which is acquiring a gold mine in Hope Bay, Nunavut.

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In response to issues by the Countrywide Write-up on Wednesday, the Embassy of the People’s Republic of China in Ottawa mentioned the selection amounted to the “politicization of normal economic cooperation” among China and Canada.

Embassy officers mentioned blocking the transaction interferes with “mutually beneficial” relations amongst the two international locations, indicating that “political interference with the excuse of nationwide security is completely wrong.”

“The Canadian side should provide a fair, open up and non-discriminatory current market surroundings for enterprises from all international locations, which include China,” the assertion stated.

Tensions between China and Canada have been running large ever due to the fact the Canadian authorities arrested Meng Wanzhou, the chief financial officer of Chinese telecom large Huawei Systems Ltd., in December 2018. Federal officers arrested Meng at the ask for of U.S. prosecutors, who have accused her of violating Iran sanctions, as properly as theft of trade insider secrets.

China in flip arrested Canadian citizens Michael Spavor and Michael Kovrig, who have remained in jail for two decades and have been barred access to legal counsel.

The arrests set off a war of words involving the two international locations, and a deepening trade rift that has ensnared a range of Canadian exports from canola to pork.

Conservative Leader Erin O’Toole has been vocal in his condemnation of the Chinese regime and has suggested imposing Magnitsky sanctions towards Chinese officials as a retaliatory evaluate.

O’Toole and others have put force on Prime Minister Justin Trudeau to stroll a harder line on China after he confronted criticism for favouring a softer approach that was eventually spurned.

The federal business department released a critique of the proposed takeover on Oct. 15. It was between the initially proposed Chinese takeovers reviewed by Ottawa following it said before this yr that it would bring “enhanced scrutiny” to foreign takeovers in the course of the COVID-19 pandemic.

Some observers, together with previous director of the Canadian Security Intelligence Services Richard Fadden, had urged Ottawa to assessment the TMAC transaction presented Beijing’s rising desire in strategic minerals.

Protection experts have long warned from the pitfalls of overseas takeovers by Chinese state-owned corporations, who on occasion have been questioned to progress the interests of the Communist Celebration of China. Those considerations have been elevated underneath the leadership of Chinese President Xi Jinping, who has aggressively sought to widen the country’s geopolitical interests by way of the acquisition of international strategic belongings.

As for the Nunavut mine, the rejected takeover now leaves the firm with key queries in excess of who else could possibly step up to purchase the asset.



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In an job interview with the Money Publish this week, TMAC main govt of TMAC Jason Neal claimed the rejection at least underscores the large status of the project.

“The one point I would say is that in using motion, the federal government has definitely demonstrated that what we have constructed in Nunavut, they see as vital to Canada,” he stated. “You know, which is a silver lining.”

But Neal also explained that he believes the federal government ought to be much more supportive of corporations that develop infrastructure in Nunavut and other pieces of the Arctic.

His organization experienced announced a strategic review of the mine in January. Found in Nunavut, the organization confronted significant operating charges simply because all its materials require to be delivered by air or sea.

Individuals fees were being exacerbated by a mill that in no way performed at the expected amount, which led to reduced gold restoration and output and troubles with credit card debt reimbursement.

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