In the "Mineral Security Partnership" (MSP) formed by the United States and its Western allies to "de-China" the supply of key minerals, Canada is highly expected due to its rich mineral resources, but the reality that Chinese companies play an important role in Canada's mining industry has put Canada in a dilemma. Canadian scholar Jack Mageau pointed out that "developed countries' reduced dependence on China provides Canada with long-term economic and geopolitical opportunities, but in order to obtain long-term benefits, Canada's reduced dependence on Chinese capital and expertise will bring major medium- and short-term challenges."
Jack Magau, who once worked at the American Enterprise Institute and is now at the China Institute at the University of Alberta in Canada, wrote an article in May this year titled "Critical Mineral Security and Canada's China Dilemma", pointing out the weight of Chinese companies in Canada's mining sector. "Even if the government decides to force three Chinese lithium companies to divest from Canada's mining industry, Chinese companies still have an important role. Chinese state-owned enterprises own 10-26% of important shares in several of Canada's largest mining companies, including Teck Resources, the world's third largest zinc producer, Canadian copper mining company First Quantum, Ivanhoe Mines and Lithium America. The major shareholders of 27 Canadian mining companies are related to China." He cited data from the China Institute at the University of Alberta, which showed that Chinese companies invested 322 times in Canada's metal and mineral industries from 2004 to 2022, totaling more than 21.6 billion Canadian dollars. Canada also recently clarified that it would not force Chinese state-owned enterprises to divest their shares in Canada's largest mining companies, so Chinese companies will continue to play an important role in Canada's mining industry. Keeping a distance from China demonstrates Canada's mining industry's commitment to global energy security, but it will put financial pressure on Canadian mining companies in the short term. Ottawa's forced divestment of Chinese lithium companies has been strongly opposed, and mining analysts warn that restricting Chinese investment will make it more difficult for junior miners to attract investment. The Toronto Stock Exchange said that restricting Chinese investment hinders the free flow of capital and companies have failed to obtain sufficient alternative funds because Ottawa's planned investment of 3.8 billion is obviously insufficient compared with the 21.6 billion Chinese investment. The mining, refining and production of key minerals require a large amount of upfront capital investment, high risks and large price fluctuations. In China, the government provides guarantees for riskier mineral projects. China plays a key role in Canada's mining industry as a "last investor", providing funds for high-risk projects and rescuing troubled mining companies. Restricting Chinese investment will deprive Canadian companies of capital inflows, resulting in a higher failure rate for mining companies and projects.
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Recently, the company completed a geophysical survey of the La Reyna project and received drilling permits for extensive exploration.
They have also secured agreements for land use rights needed for exploration and drilling.
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