【By Chen Sijia, Observer Net】 Recently, the U.S. government has invested in two key Canadian mining companies, causing concerns in Canada. According to a report by the Canadian Broadcasting Corporation (CBC) on October 13, this move by the U.S. government is unusual. Canadian experts have warned that foreign governments acquiring shares may affect the activities of relevant companies, posing a national security risk to Canada.

Last week, the White House announced that the U.S. government will invest $35.6 million to acquire 10% of the shares of Trilogy Metals, a mineral exploration company based in Vancouver, Canada, which holds mineral rights in Alaska, USA. The U.S. hopes to develop these resources. The U.S. government has the option to acquire more shares in the future and has the right to appoint members of the company's board of directors.

The U.S. Department of Energy also acquired 5% of the shares of Lithium Americas, a mining company based in Vancouver, which is collaborating with General Motors of the United States to develop one of the largest lithium deposits in the U.S., the Sackpasse lithium mine in Nevada.

Given that former U.S. President Trump once declared "annexing Canada," the new moves by the U.S. government have made the Canadian public anxious. Lawrence Herman, a senior researcher at the Howe Institute, a Canadian think tank, said that the U.S. government directly investing in Canadian companies is "unprecedented."

Herman said, "This is not a normal investment by a company in the open market; it is an investment by a U.S. government agency. Now, our relationship with this government is tense and complex." He warned that even if a foreign government holds only a small stake, it could affect the activities of the relevant companies, and the U.S. government might gain access to key technologies and sensitive information.

Herman believes that the Canadian government should closely monitor the U.S. investments and consider conducting a national security review. According to the Canadian Investment Act, the Canadian government can review any investment by a foreign government.

Medebach Mine in Nunavut, Canada - Reuters

Rita Trichur, a columnist for The Globe and Mail of Canada, wrote that just before Trump met with Canadian Prime Minister Trudeau on the 7th, the U.S. government announced its investment in Canadian mining companies, which was obviously a "calculated move" aimed at showcasing the economic strength of the United States, "telling Canada who is the boss."

Trichur believes that Trump not only wants to obtain Canada's mineral resources but also tries to exert economic pressure on Canada, posing a risk to Canada's national security. However, dealing with this risk is a major challenge. Although the Canadian government can invoke the investment law for a national security review, blocking U.S. government investment would inevitably lead to further deterioration of bilateral relations.

Richard Leblanc, a professor at York University in Canada, said that it is very rare for the U.S. government to invest in Canadian companies. He pointed out that the current U.S. government is not only a major shareholder of the mining company but also has the ability to change the investment environment through regulations and policies.

"Having an external investor who can control regulatory approval is it a conflict of interest? It absolutely is a conflict of interest," Leblanc said. "Other shareholders cannot control regulatory approval, so this creates a super shareholder."

Leblanc used Trilogy Metals as an example, stating that the U.S. government holding 10% of the shares of the company can directly or indirectly influence the board, potentially leading to unfair treatment of Canadian shareholders. He warned that Canada needs to take measures for "separation" to prevent situations where the interests of the company and the U.S. government, as a shareholder or regulator, are inconsistent.

Sandy Walker, co-chair of the competition and foreign investment review team at the law firm Dentons, believes that since the Trump administration's investment in Canadian companies is a non-controlling investment, it may not cause major problems. Given that Canada hopes to reach a trade agreement with the United States, the Canadian government may not oppose these investments.

However, Walker pointed out that if the U.S. government insists that certain mines can only supply resources to the United States, the Canadian government may find itself in a dilemma. She said, "That would be a situation that could worry the Canadian government, involving domestic supply chains."

David Rosner, head of the competition and foreign investment team at the Canadian business law firm Goodmans LLP, is more optimistic. He pointed out that although these mining companies are headquartered in Canada, their mine assets are mainly located in the United States. "If the U.S. government acts cautiously towards the mines, it is acceptable, as these assets are within the country," he said.

Nevertheless, he stated that if there is a trend of more foreign government investments in key mineral companies in the future, Canada will need to develop new response policies, "which may generate related concerns during this process."

Canada is a major producer of critical minerals such as copper, nickel, and cobalt. The Canadian Department of Natural Resources states that it is estimated that Canada had 15.2 million tons of rare earth oxide reserves in 2023. Data released by the department shows that in 2024, exports from Canada's mining industry increased by 2%, reaching 153.3 billion Canadian dollars, accounting for 21% of Canada's total goods exports.

In response to the U.S. government's investment in two Canadian mining companies, the Canadian Department of Innovation, Science and Economic Development stated in a statement to CBC that foreign investments in critical minerals will be reviewed "based on Canada's best interests." However, due to confidentiality clauses in the relevant regulations, they will not comment on specific investments.

For several months, Trump has repeatedly publicly advocated for "annexing Canada" and expressed willingness to achieve this goal through "economic power." On October 7 local time, Trump met with Canadian Prime Minister Trudeau at the White House. Canada hoped to reach some important consensus on trade and tariff issues between the two countries, paving the way for the final achievement of a new economic and security agreement between the two countries.

During a media interview in the Oval Office, Trudeau listed some achievements of Trump during his second term. When Trudeau said "most importantly in many ways," Trump interjected when Trudeau paused, saying, "and the merger of Canada and the United States." Trudeau then responded, "I didn't think that much."

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