Veriton Investment

Canada Will Review Trump Minerals Deals Carefully, Minister Says

(Bloomberg) — Canada needs to assess US government investments in the country’s critical minerals companies on a “case-by-case basis” at a time when the Trump administration is pursuing a nationalist economic policy, Industry Minister Melanie Joly said.

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“What we’re seeing in the US is definitely the emergence of greater economic nationalism, including the government taking stakes in companies,” Joly told media Friday at an event in Montreal. “All governments in the world need to adapt to that, so we will do so as well.”

The minister’s comments come days after the Trump administration announced it would take a 10% stake in Trilogy Metals Inc. (TMQ) as part of a $35.6 million investment to boost critical minerals projects in Alaska. The US also agreed last month to acquire an interest in Lithium Americas Corp. (LAC), which is developing the Thacker Pass lithium project in Nevada. Both companies are based in Vancouver.

Joly declined to comment specifically on the two transactions, which should fall under federal rules for investments by state-owned entities and foreign governments. The government will evaluate deals “on a case-by-case basis through the Investment Canada Act application,” she said.

But it’s not clear how much leverage the Canadian government really has to stop the Trilogy or Lithium Americas deals — or even whether it wants to.

“If Canada puts up a fight and these companies are forced to relocate to get access to US government funds, I think that they would probably do that in a hurry,” said Brian Laks, a partner at Old West Investment Management, which has investments in both miners.

Canada has made it harder in the past few years for foreign, state-owned firms to acquire its mining companies. Under former Prime Minister Justin Trudeau, the government thwarted a number of attempts by Chinese entities to take large stakes in firms with lithium and copper projects.

“Now we have a challenge: we need to find ways to attract capital while being able to be a sovereign country and to be able to control a lot of these critical minerals and where they go,” Joly said. “So we’re in ongoing conversations with different governments.”

—With assistance from Jacob Lorinc.