The TMAC Resources’ Hope Bay, Nunavut property just off the strategic NW Passage. (TMAC Resources)

Canada rejects Chinese bid for Arctic gold mine over national security concerns

The sale of a gold mine in Canada’s Arctic to a Chinese firm has been blocked by the federal government.

The $230 million deal was to sell all TMAC Resources shares and its Hope Bay gold mining project to Shandong Gold Mining Co. Ltd. It has now been blocked after a lengthy national security review under the terms of the Investment Canada Act. Shandong is a Chinese state-owned company.

A spokesperson for Innovation, Science and Economic Development Canada, the department which oversees investment, would not offer comment on the reasons for the rejection of the deal citing confidentiality provisions of the Investment Act.

Mark Warner, principal counsel with international business law firm MAAW Law said he was not surprised, telling CBC news. “Even if gold isn’t a critical mineral itself, the Arctic is a critical, objective, strategic objective of China”. Both he and other analysts also suggest that the blocked deal had undertones of the conflict between Canada and China over the Meng Wanzhou case. The Huawei executive was detained two years ago in Canada on a U.S. extradition case, and two Canadians in China were arrested on allegations of spying. Since then relations between Canada and China have been at all time lows.

Security concerns

Retired Canadian Major-General David Fraser quoted in the Globe and Mail last month had urged the government to reject the Chinese offer saying of the Hope Bay mine, “This thing has a port attached to it. [China has] written a paper saying they want to be a near-Arctic power. Well, this gives them actual Arctic access. If you look at what they have done on the South China Sea to extend their area of influence – what’s to stop them, once they get squatter’s rights and get into this port, of doing the same thing up there?

He also noted the proximity of the site to a sensitive military installation, the NORAD warning system radar at Cambridge Bay about 100 kilometres away, adding, “We don’t need an economic foe and a political foe sitting here in my country, near some of these sites”.

Richard Fadden, a former director of the Canadian Security Intelligence Service, was quoted in the Wall Street Journal in July saying,  “This purchase should not go forward. They (China) are clearly adversaries, and I think we have to take that into account every time they seek to buy something”.

Richard Fadden, (then) National Security Adviser to the Prime Minister, appears at Senate national security and defence committee in Ottawa on Apr. 27, 2015. Fadden, a former head of Canada’s spy agency, says Canada needs to take a hard look at itself to ensure it is ready to face new threats. He was among many security experts urging rejection of China’s bid to obtain a presence in the Arctic through purchase of the TMAC mine (Sean Kilpatrick/THE CANADIAN PRESS)

The Canadian non-partisan think tank, The Macdonald Laurier Institute noted in October in a report called, ‘Hard Choices: Why Canada needs a cohesive, consistent strategy towards Communist China that, “In China’s stated plans to ‘create a new global power structure by 2049,’ Canada is seen as a soft target for Beijing’s ambitions in North America. It is therefore imperative for Canada to develop a strategy which takes seriously the threats posed by the PRC”.

China is already active in the Canadian Arctic with another state-owned firm MMG Resources controlling lead, copper and zinc deposits in western Nunavut along with other Chinese state-owned investments in Sabina Gold and Silver Corp which is also active in Nunavut.

Additional information sources

Categories: International, Politics
Tags: , , ,

Do you want to report an error or a typo? Click here!

For reasons beyond our control, and for an undetermined period of time, our comment section is now closed. However, our social networks remain open to your contributions.