By Canadian Press

Members of Congress call out Canada for approving Neo Lithium sale to Chinese company

Feb 24, 2022 | 10:43 AM

WASHINGTON — A group of House Republicans wants to know more about why Canada didn’t red-flag the pending Chinese takeover of a lithium producer with offices in Toronto. 

The three members of Congress are also asking the Biden administration to brief Congress on how Canada and the U.S. are working together to shore up critical mineral supply chains. 

Rep. Michael Waltz, Rep. Elise Stefanik and Rep. Lance Gooden say they are concerned about the fact that Ottawa allowed the sale of Neo Lithium Corp., which is listed on the Toronto Stock Exchange, to a Chinese state-owned enterprise. 

The federal government says Neo Lithium, while incorporated in Canada, is actually based in Argentina and that an initial review found no concerns.

But a letter from the trio to key Biden administration cabinet members, including Secretary of State Antony Blinken, raises misgivings about whether the U.S. should be working with Canada on critical minerals. 

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The letter comes as the U.S. unveils its plans for revamping domestic and international supply chains — and as the two countries mark the anniversary of last year’s landmark “road map” for bilateral co-operation. 

“The acquisition by the Chinese Communist Party of a Canadian critical mineral mining company … is highly concerning,” the three House members wrote in the letter, released Thursday. 

It also raises “a litany of questions” about whether Canada and the U.S. fully understand the national security threat posed by China, the letter continues. 

Those questions seem to include whether Canada is acting in good faith under the terms of a bilateral “action plan” on securing critical mineral supply chains, first agreed to in 2020 and reaffirmed by Biden last year.  

“The Canadian government’s complicit approval also raises questions regarding the extent of co-operation with the United States in accordance with the action plan, including whether the United States government was aware or notified of the pending transaction.”

Last month, Industry Minister François-Philippe Champagne said the sale was subjected to a thorough national security review in accordance to the rules set out in the Investment Canada Act. 

Such reviews, he said, are “enhanced” when they involve either a state-owned enterprise like China’s Zijin Mining Group Ltd. or critical minerals, a vital component of modern-day electronics and electric vehicles. 

Champagne also said that Neo Lithium’s main project in Argentina involves lithium carbonate, not the lithium hydroxide coveted by EV manufacturers. 

This report by The Canadian Press was first published Feb. 24, 2022. 

James McCarten, The Canadian Press