July 19, 2024
Last week Ottawa approved the sale of Teck Resources Ltd.’s coal unit to Switzerland-based Glencore PLC, but raised the bar on foreign investment in critical minerals.

Building ‘local mining champions’ gets tougher as Ottawa raises bar for foreign investment again

Government needs to find new funding for mining industry starving for capital, say insiders

The federal government’s decision to further raise the bar for foreign companies looking to invest in Canada’s mining companies could be “dangerous” if it doesn’t create avenues for miners to get more access to funding, some industry insiders say.

On Friday, the government said transactions involving foreign companies looking to buy large Canadian companies that produce critical minerals such as lithium, copper or nickel would only be approved “in the most exceptional” of circumstances.

“They want to protect Canadian resources, but they need a better framework for capital creation and they don’t have that,” said Peter Grosskopf, chair of SCP Resource Finance LP, an independent broker specializing in mining. “We know the mining sector is dreadfully undersupplied with capital in this country.”

This isn’t the first time that Justin Trudeau’s government has raised the bar for foreign companies looking to invest in Canada’s critical minerals sector because it wants to keep assets it believes are important for the  transition away from fossil fuel-based energy to electric vehicles and other devices that rely on clean energy.

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