Canada Kicks Chinese Companies Out of Lithium Mining

­After placing restrictions on foreign participation in supplying "critical minerals" used in batteries and high-tech devices, the government of Canada has ordered three Chinese companies to divest their lithium mining holdings in that nation.

The order issued on Wednesday comes as tensions between the West and China increase over who will control the supply of minerals such as lithium, rare earths, cadmium, and other materials used in solar cells, wind turbines, mobile phones, electric cars, and other new technologies.

As the ruling Communist Party promotes the growth of the renewable energy, electric vehicle, and other tech industries, Chinese miners are investing in manufacturing in Africa, Latin America, Canada, and other places.

Francois-Philippe Champagne, the Minister of Innovation, announced restrictions this week on foreign state-owned firms' ability to produce "critical minerals." Any level of investment, he warned, would only be accepted on an "extraordinary basis."

Following Russia's war on Ukraine, which disrupted the world's oil and gas markets, and conflict with China, which produces the majority of the world's rare earths, Western governments want industrial supply chains controlled by allies.

A court mandated that Sinomine (Hong Kong) Rare Metals Resources sell its shares in Power Metals Corp., a Vancouver-based company with tantalum, lithium, and cesium exploration interests in northern Ontario.

Chengze Lithium International Ltd. must sell its shares in Lithium Chile Inc., a Calgary-based business with active lithium properties in Chile. The Vancouver-based Ultra Lithium Inc., which has lithium and gold properties in Canada and Argentina, was ordered to sell Zangge Mining Investment's interest.

Champagne said in a statement that while Canada welcomes foreign investment, it “will act decisively when investments threaten our national security and our critical minerals supply chains."

Lithium demand is higher than ever, and while lithium production is expected to increase by 21% in 2021, global lithium consumption is expected to increase by 33%. The gap will widen as the West moves further away from China's lithium supplies, prompting calls for at least $42 billion in lithium investment over the next six years to meet 2030's forecasted demand of 2.4 million tonnes per year. 

Canada (particularly Québec and Ontario) is currently positioning itself to be a major player in the global lithium stage, with large hard rock spodumene deposits and brine-based lithium resources in place.

As a result, companies active in the region, such as FE Battery Metals (CSE:FE (OTCQB:FEMFD), are gaining attention due to their prime real estate and exceptional Infrastructure in a mining-friendly jurisdiction.

FE Battery Metals has secured one of the most dominant land positions just northwest of Val d'Or, Québec, consisting of several historical finds as well as new lithium prospects discovered through current exploration activities.

FE has discovered numerous spodumene pegmatites on its property since acquiring it, all while focusing on its Augustus Lithium Project, which is located just west of the North American Lithium Mine.