Canada has ordered three Chinese companies to divest their investments from critical Canadian minerals, citing national security.
As countries race to build up stockpiles of materials needed for a transition to a cleaner economy, the decision has weighed on shares of Chinese companies.
The companies that have divested are Sinomine, Rare Metals Resources, Chengze Lithium International and Zangge Mining Investment. The Canadian government ordered the sale after “rigorous review” of the foreign firms by Canada’s national security and intelligence community.
Sinomine was asked to sell its investment in Power Metals, Chengze Lithium was asked to divest its investment in Lithium Chile and Zangge Mining was required to exit Ultra Lithium.
Lithium prices have risen more than 200 percent in the past year, driven by supply constraints that are expected to continue. Rystad Energy forecast primary lithium ore supply to be 8.5% lower than total lithium demand for 2025, compared with about a 10% demand shortfall this year.
Ottawa has said it needs to build a resilient critical minerals supply chain with like-minded partners as it outlines rules aimed at protecting the country’s critical minerals sectors from foreign state-owned companies.
Canada has large deposits of critical minerals such as nickel and cobalt essential for cleaner energy and other technologies. The demand for minerals is predicted to increase in the coming decades. Earlier this year, countries including Great Britain, Canada and the United States created a partnership aimed at securing supplies of critical minerals as global demand for them grows.