Investment
Miners grow anxious as Canada tightens foreign investment rules
TORONTO, March 5 (Reuters) – Junior mining companies hoping to produce lithium, nickel and other green energy metals are worried that Canada’s crackdown on some overseas investors may limit their ability to raise funds for mines and related facilities.
Ottawa last fall proposed bolstering its Investment Canada Act (ICA) to give government ministers power to block or unwind critical minerals investments if they believe such deals threaten national security. The changes would essentially give the government greater control over companies listed on the Toronto Stock Exchange and are expected to be finalized this spring.
That tension will be top of mind at this week’s annual Prospectors and Developers Association of Canada (PDAC) conference in Toronto, one of the world’s largest gatherings of mining companies and their financiers.
Nearly half of the world’s mining companies are listed in Toronto and the city has long been a premier destination for junior mining companies to raise funds, above even rival exchanges in Sydney, New York and London.
“The ICA review process could be lengthy and unpredictable, leading to uncertainty for potential investors and may make it more difficult for junior miners to attract investments,” said Stephen Payne, who runs the energy and natural resources team at consultancy BDO Advisory.
The changes are widely seen as a defensive measure against China, which has invested $7 billion in Canada’s base metals sector in the past 20 years, according to S&P Market Intelligence. Canadian officials last fall ordered Chinese companies to sell stakes in three Toronto-listed lithium companies, two of which are developing mines outside Canada.
“The effect of these orders was to spook investors and likely drive capital and mining entrepreneurs to other jurisdictions,” said Paul Fornazzari, an attorney for one of the companies forced to shed its Chinese investors.
Canada’s Industry Ministry, which is spearheading the rules change, called critical minerals “key to the future prosperity of our country.”
“We are determined to work with Canadian businesses to attract foreign direct investments from partners that share our interests and values,” said a spokesperson for Industry Minister Francois Philippe Champagne.
However, the government’s crackdown could rebound and hurt Canada as the mining industry underpins a large part of the country’s economy, investors and analysts say.
“No doubt the implications of a decision to restrict a major avenue of capital flow needs to be supplemented by capital that is similar in size and timely,” said Dean McPherson, head of global mining at the Toronto Stock Exchange.
Ottawa last year had launched plans to invest C$3.8 billion ($2.79 billion) to boost Canada’s own critical materials sector and streamline mine permitting.
“The government has to be mindful that they’re potentially creating a gap that has to be filled,” said Pierre Gratton, president of the Mining Association of Canada, an industry trade group.
($1 = 1.3603 Canadian dollars)
Reporting by Divya Rajagopal; Editing by Josie Kao
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Economy
S&P/TSX composite down more than 200 points, U.S. stock markets also fall
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
Economy
S&P/TSX composite up more than 150 points, U.S. stock markets also higher
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
Companies in this story: (TSX:GSPTSE, TSX:CADUSD)
The Canadian Press. All rights reserved.
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