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Chinese takeover of arctic gold mine would be a “net benefit”, claims Shandong Gold

Shandong Gold Mining made a $230 million offer to acquire TMAC Resources' Hope Bay mining operation in May.

One executive of a Chinese company hoping to acquire a Canadian gold mine in Nunavut claimed that the sale would be a “net benefit” to Canadians. 

“The net benefit to Canada will be an international company focused on … continuing to drive and expand Canadian employment and the broader spend from Canadian suppliers,” said Shandong chief executive Mark Wall. 

Shandong Gold Mining made a $230 million offer to acquire TMAC Resources’ Hope Bay mining operation in May. 

The deal is currently under review by the federal government.

National security experts and politicians have warned that foreign takeovers of Canadian resource projects could threaten Canada’s sovereignty.

Shortly after the deal was announced, former director of the Canadian Security Intelligence Service (CSIS) Richard Fadden warned the government that national security implications should be taken into account when reviewing the deal.

“There was a worry that the Chinese seemed to be very knowledgeable about regulatory thresholds and were coming just underneath them and, as is well known, Chinese corporations abroad are required to comply with Chinese government directives,” said Fadden.

Fadden’s views were echoed by CSIS in their 2019 annual report. In the report, CSIS suggests that foreign takeovers of Canadian companies could pose inherent risks. 

“While the vast majority of the foreign investment in Canada is carried out in an open and transparent manner, a number of state-owned enterprises (SOEs) and private firms with close ties to their government and or intelligence services can pursue corporate acquisition bids in Canada or other economic activities,” claims CSIS.

“Corporate acquisitions by these entities pose potential risks related to vulnerabilities in critical infrastructure, control over strategic sectors, espionage and foreign influenced activities, and illegal transfer of technology and expertise. CSIS expects that national security concerns related to foreign investments or other economic activities in Canada will continue.”

One politician from Canada’s north has also publicly spoken out against the deal. In June, Yellowknife MLA Rylund Johnson compared China’s bid to colonization.

“There is no benefit to the Inuit in having a Canadian colonizer swapped out for a Chinese one,” Johnson wrote. 

“There are so many risks that come with allowing the Chinese government to increase influence in the Arctic, including the fact they are one of our main competitors in mining.”

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