Bloomberg has reported that the Canadian government has stepped in to purchase a stockpile of rare earth materials from Vital Metals Ltd., an Australian company that operates a mine in Canada’s Northwest Territories. This move prevents the company from proceeding with its initial plan to sell its production to a Chinese buyer.
Vital Metals had previously planned to sell its stockpile of rare earth materials to China’s Shenghe Resources Holding Co. for C$3M. However, the Canadian federal government facilitated a deal for the Saskatchewan Research Council to purchase the stockpile for C$3M, effectively halting Vital’s plan.
Vital Metals’ rare earths mine is recognized by Canada as a strategic asset that contributes to the nation’s prosperity and critical mineral objectives. This recognition was publicly acknowledged by Vital Metals on Monday;
“This agreement highlights the strategic value and importance of the Nechalacho rare earths project, and the prioritization of a rare earths value chain in Cananda.” Said MD, Dr Geordie Mark.
The move is part of a broader effort by the Canadian government, led by Prime Minister Justin Trudeau, to prevent Chinese companies from further penetrating Canada’s critical minerals sector. The government has issued a warning that it will closely monitor transactions between domestic mining companies and firms linked to the Chinese government, approving deals only on an exceptional basis. In 2022, it even directed three Chinese investors to divest their stakes in a group of Canadian lithium companies.
In a related development, Solaris Resources Inc., a Canadian copper mining company, abandoned a financing agreement with a Chinese firm in May after the deal underwent an extensive national security review by the federal government.
The rare earth materials stockpiled by Vital will be used in a rare earths processing facility that the Saskatchewan Research Council is constructing. The council, which is government-run, has made similar acquisitions in the past and has even signed a contract to import rare earth carbonate from Hung Thinh Group, a minerals producer based in Vietnam.
