Canada’s government has blocked a Chinese company from acquiring a Toronto-based firm that runs a gold mine in the Arctic due to national security reasons, the company said Tuesday.
A statement from Shandong Gold Mining Co., which is owned by the Chinese government, said that a review required by law under Canada’s Investment Canada Act had resulted in a decision denying the acquisition of TMAC Resources Inc. “for the purpose of safeguarding national security.” Bloomberg reported that TMAC owns the Hope Bay gold mine in Nunavut, a property that would have been part of a $150 million purchase by Shandong.
No other information about the reasoning for the rejection of Shandong’s application was immediately given, however, both the U.S. and Canada have publicly identified the Arctic as a possible area of contention with China and Russia due to the region’s natural resources.
Security experts told Bloomberg that the mine’s acquisition could have given China better access to the Northwest Passage sea route connecting the Atlantic and Pacific.
Canada’s Investment Act oversees foreign nationals “who acquire control of an existing Canadian business or who wish to establish a new unrelated Canadian business,” according to the government’s website. It allows Canada’s government to reject the purchase of businesses by firms connected to foreign powers in ways that could jeopardize Canada’s national security, and functions in a manner similar to the U.S.’s Committee on Foreign Investment, run under the Treasury Department.
Officials with the U.S. Treasury moved earlier this year to empower that committee to block some foreign investors from acquiring stakes in U.S. tech firms and other industries the U.S. deems relevant to national security.