Yahoo Finance Copper Firm Drops China Financing Deal After Canadian Scrutiny
(Bloomberg) -- Copper company Solaris Resources Inc. called off a financing deal with a Chinese miner after facing a lengthy review from Canada, which has sought to curb foreign state-owned investment in its natural resources.
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The Vancouver-based firm said Tuesday it was voluntarily terminating the deal with Zijin Mining Group after four months of review. The company said it expected approval sooner and the deal no longer reflects market value.
Solaris’ plans to sell a 15% stake to Zijin for $130 million, announced in January, came as Canada has cracked down on Chinese government-linked firms investing in the critical minerals sector. Canada has warned such deals will only be approved ‘on an exceptional basis.’ In 2022, it ordered three Chinese investors to sell their stakes in a trio of Canadian lithium firms.
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Solaris said the regulatory uncertainty around the deal was unfair to investors and weighed on its shares.
“That this transaction cannot be completed in a reasonable time frame signals that Canada’s critical minerals policy is counterproductive in relation to foreign assets,” said Solaris Chief Executive Officer Daniel Earle in a statement.
Zijin’s investment would have been used to advance Solaris’ flagship copper project in Ecuador. It also would have given Zijin a seat on Solaris’ board of directors.
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