Canada ISED orders three Chinese mining companies to divest critical mineral investments (Nov 2022)

Summary

On November 2, 2022, Canada's Minister of Innovation, Science and Economic Development ordered three Chinese-controlled companies to divest their investments in Canadian critical mineral companies, citing national security concerns under the Investment Canada Act (ICA). This was the first time Canada had issued multiple simultaneous divestiture orders in the critical minerals sector:

1. Sinomine Resource Group (CN): ordered to divest its interest in Power Metals Corp (Toronto-listed lithium junior) 2. Chengze Lithium International (CN): ordered to divest its stake in Lithium Chile Inc. (TSX-V; holds Chilean lithium brine properties) 3. Zangge Mining Investment (CN): ordered to divest from Ultra Lithium Inc. (TSX-V; holds Argentine lithium brines)

All three are lithium-focused junior miners. Minister Champagne announced simultaneously that Canada would apply "enhanced scrutiny" to all future foreign SOE investments in the critical minerals sector, with a strong presumption of rejection for Chinese state-directed investments.

State instruments

• Investment Canada Act §25.3: National security review powers allow the Minister to order divestiture, impose conditions, or block transactions — the same legal vehicle as CFIUS in the US. These were the first mineral-sector ICA divestiture orders directed explicitly at Chinese capital.
• Policy signal: ISED simultaneously announced that going forward, "any proposed foreign investments by state-owned enterprises in Canadian critical mineral companies will only be approved in the most exceptional of circumstances."
• Scope: All three targets are junior miners with no producing assets, but the orders apply to exploration-stage stakes — signalling that any Chinese entry into the Canadian lithium supply chain is subject to national security review regardless of asset stage.

Key figures

• Three divestiture orders: Sinomine / Power Metals; Chengze / Lithium Chile; Zangge / Ultra Lithium
• All lithium-focused exploration-stage assets
• Policy anchor: Investment Canada Act §25.3 national security review
• Policy signal: enhanced scrutiny / near-prohibition on Chinese SOE investment in Canadian critical minerals from November 2022 onwards