Three Chinese companies expressed confusion and are reviewing their options after the Canadian government ordered them to divest from three lithium mines based in Canada, citing national security concerns.
Sinomine (Hong Kong) Rare Metals Resources Co was required to divest from Vancouver-based Power Metals Corp., Chengze Lithium International must exit from Calgary-based Lithium Chile Inc and Zangge Mining Investment (Chengdu) Co, was ordered to divest from Ultra Lithium Inc., based in Vancouver, Canada’s federal government said Wednesday.
An employee with the securities department of Zangge Mining Co said that they are not fully aware of the issue and are seeking more information. “Of course, our investment is in compliance with local regulations…it is also impossible for us to invest so much money and go to waste. There is a need for an explanation [from the Canadian side].”
“We have just noticed this news and are further verifying this matter,” said an employee from Chengxin Lithium, the parental company of the Chengze Lithium International based in Hong Kong.
All of the company’s investments in Canada are in compliance with local regulations and the process of applying for the investment was also approved by the Canadian government, the person said.
At present, the mine is still in the early stage of exploration, and the company holds only a minor percent of shares.
The employee said that the company only invested money, and there is no actual business activity involved – local firm, Lithium Chile Inc, is responsible for exploration. Despite the sudden disruption, the company expected minor impact to its global business, given that their current mine supply does not significantly depend on Canada.
“We have our own mines in Southwest China’s Sichuan Province and Africa, while the Canadian mine accounts for a small proportion of our global business,” the employee said. “What we value is also the future resources of the Canadian mine…after all, it is still under exploration,” she added.
State-owned company Sinomine Resource Group Co also expected the decision from the Canadian side will have very limited impact to its business operations.
An employee said in the conference call that the company’s subsidiary received notice early this morning. The matter only affects the Power Metals transaction and will not affect the operation of Tanco Mine in Canada, according to the employee.