By Divya Rajagopal
TORONTO (Reuters) - Canada on Thursday put the mining industry on notice that any major deals targeting the country's producers of critical minerals would only be approved under "the most exceptional circumstances".
The announcement by Industry Minister Francois-Philippe Champagne came as he imposed strict conditions with the approval of Glencore (LON:GLEN)'s $6.93 billion acquisition of Teck Resources' steelmaking coal business.
The government has identified 31 minerals, including copper, lithium and nickel, that it considers critical for their strategic uses in modern technology and the energy transition, such as in electric vehicle batteries.
Under the Investment Canada Act the government can approve or reject mergers and acquisitions based on their net benefit to the country.
Champagne said the government would now set a high bar when assessing the net benefits of any deal involving critical minerals producers, adding this reflected how important it was to protect what it considers a strategic sector.
"Henceforth, such transactions will only be found of net benefit in the most exceptional of circumstances," he said.
Some of the country's largest mining companies are copper producers, which means any foreign investment involving those miners would face intense scrutiny.
Canada in the last two years has taken a tough stance on foreign investments in the critical minerals space, specifically from China where it has asked investors to divest from Canadian companies due to their Chinese involvement.