Canada Blocks Chinese Rare Earths Deal in Trudeau-Led Crackdown
(Bloomberg) -- Canada’s government will buy stockpiled rare earth materials from Vital Metals Ltd. in a deal that prevents the company from selling its production to a Chinese buyer.
Most Read from Bloomberg
Flesh-Eating Bacteria That Can Kill in Two Days Spreads in Japan
S&P 500 Hits 30th Record of 2024 as Megacaps Rally: Markets Wrap
These Are the World’s Most Expensive Cities for Expats in 2024
How the US Mopped Up a Third of Global Capital Flows Since Covid
The small Australian firm, which mines rare earths in Canada’s Northwest Territories, will sell its stockpiled rare earth material to the Saskatchewan Research Council for C$3 million ($2.2 million). The arrangement, facilitated by Canada’s federal government, keeps Vital from moving forward on a plan it started in December to sell that same stockpile to China’s Shenghe Resources Holding Co. for C$2.4 million ($1.7 million).
Canada recognizes the rare earths mine as a “strategic asset that contributes to the country’s prosperity and critical mineral goals,” Vital Metals said Monday.
The intervention is part of a wider push to block Chinese firms from delving further into Canada’s critical minerals sector. Prime Minister Justin Trudeau’s government has warned it will closely scrutinize transactions between domestic mining companies and Chinese government-linked firms and only approve deals “on an exceptional basis.” In 2022, it ordered three Chinese investors to sell their stakes in a trio of Canadian lithium firms.
In May, Canadian copper miner Solaris Resources Inc. dropped a financing deal with a Chinese firm after the arrangement was subject to a lengthy national security review from the federal government.
Vital’s stockpiled material will go toward a rare earths processing facility being built by the Saskatchewan Research Council, which has made similar purchases. The government-run council previously signed an agreement to import rare earth carbonate from Hung Thinh Group, a Vietnamese minerals producer.
Most Read from Bloomberg Businessweek
Google DeepMind Shifts From Research Lab to AI Product Factory
Trump’s Planned Tariffs Would Tax US Households, Economists Warn
It Will Take More Than US Bargaining Power to Cut Drug Costs
Grieving Families Blame Panera’s Charged Lemonade for Leaving a Deadly Legacy
©2024 Bloomberg L.P.