Chinese mining company Carbon ONE New Energy Group Co. Ltd (C-One) is looking to buy a 19.4% stake in Canadian miner SRG Mining Inc. for $16.9 million. That's nothing new: Chinese companies have been snapping up Canadian companies (and parts of them) for years now, particularly those in the "critical minerals" sector.
What is new is Canada's new-found wariness of these kinds of Chinese deals. What China is really after is SRG's graphite mine in the Republic of Guinea, and this deal would almost certainly attract a Canadian national security review. Nobody really knows anything about C-One, but it's probably connected to, or controlled by, the Chinese government - most large Chinese companies are.
But what's really new is that SRG hopes to find a workaround by relocating ("redomiciling") to UAE. That way, they would technically not be a Canadian company, and therefore not be subject to Canadian government oversight (or overreach, as they would probably see it), although they still hopes to somehow retain the company's listing on the TSX Venture Exchange.
Can they do that? Legally, they probably can, although, as one mining strategist put it, "it doesn't have a good look to it". For its part, the Canadian government has said that it will "make its own determinations of the applicability of the Investment Canada Act". If SRG's move goes through, it could trigger "a stampede" of Canadian companies, particularly those in the critical minerals sector, fleeing the country to avoid potential financing restrictions under the Investment Canada Act.
So, full marks to SRG Mining for initiative; zero marks for moral standards.
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