The federal government’s attempt to clarify its rules for foreign investment in mining is instead causing more confusion as the industry grapples with changing rules under the Investment Canada Act.
But Rio Tinto’s (NYSE: RIO; LSE: RIO; ASX: RIO) interest in buying Teck Resources (TSX: TCK.A/TCK.B; NYSE: TECK), as reported by Sky News, could serve as a test for what the feds will allow as it tries to keep critical minerals available for Canada.
Last week, as the federal government formally approved Glencore’s purchase of a 77% stake in Teck’s coal business, Minister of Innovation, Science and Industry François-Philippe Champagne issued a statement saying the government would only greenlight futur foreign takeovers of “important Canadian mining companies engaged in significant critical minerals operations… in the most exceptional of circumstances.”
Most such transactions would not pass the “net benefit” test under the Investment Canada Act (ICA), he said.
“This high bar is reflective of the strategic importance of Canada’s critical minerals sector and how important it is that we take decisive action to protect it,” he added.
