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Although the Canadian government has taken various measures to limit foreign investment in its mining sector, Shaoyang Shen, Vice President of Zijin Mining Group, stated in a media interview in the U.S. on Tuesday that the company is undeterred by the pressure and will “absolutely” continue investing in Canadian mining companies, especially junior exploration companies.
In 2022, Canada tightened its review of foreign investments in the mining industry, particularly in the critical minerals sector.
Shen emphasized that Canada has some of the world’s best mineral exploration companies, and cooperation serves the best interests of both parties. He believes that market-based transactions without political interference benefit all involved, promoting better resource development projects, and he feels this view is shared as a consensus in the industry.
Zijin Mining is China’s most valuable mining company and the only Chinese enterprise with copper production exceeding one million tons. By the end of 2023, Zijin Mining had become China’s largest producer of mined copper, zinc, and gold (including overseas production), ranking fifth, fourth, and eighth globally, respectively. It has remained at the forefront as the “King of Chinese Mining” for several years.
Since 2009, Zijin Mining has initiated over 20 mergers and acquisitions with significant investments, such as announcing the acquisition of all shares of Canadian-listed mining company Nevsun in 2018, acquiring interests in the Timok copper-gold mine from Freeport-McMoran in 2019, and purchasing Canadian mining company Continental Gold for $1 billion.
However, in recent years, the Canadian government has been actively restricting mining transactions involving foreign state-owned enterprises, widely seen as targeting China’s dominance in the global critical minerals supply chain. In 2022, Canada forced three Chinese investment companies to divest their holdings in Canadian critical mineral companies, some of which did not even own mines in Canada.
Zijin Mining’s overseas expansion has consequently encountered setbacks. Recently, Canadian mining firm Solaris Resources stated it had abandoned plans to sell a minority stake to Zijin Mining due to concerns that the deal might not meet the standards of Canada’s Investment Canada Act review. In January, Solaris announced plans to sell a 15% stake to Zijin for CAD 130 million to help develop Ecuador’s Warintza copper project.
In response to these barriers to Chinese investment in Canada’s mining sector, China’s ambassador to Canada expressed dissatisfaction in March, describing such pressure as “unfortunate” and “wrong.”
Nonetheless, Chinese investment continues to flow into Canada’s mining sector, offering hope to Canadian junior miners in need of funding. A study by the University of Alberta found that in 2023, Canadian critical minerals companies received at least 12 investments from mainland China and Hong Kong, valued at CAD 2.2 billion, significantly up from CAD 62 million in 2022.
According to the China Institute, China has been one of the most active investors in Canada’s mining industry, with a total investment of CAD 21 billion from 1993 to 2023.
