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Canada has inked an agreement with Australia to work together in developing the minerals needed for the energy transition away from fossil fuels, as both look to reduce their dependence for raw materials on China and pivot more towards friendlier nations.
The non-legally binding agreement means the two nations will work together to extract these minerals responsibly, improve transparency, build partnerships, conduct joint research and development programs and share industry growth models.
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The joint statement said that Canada and Australia share a “like-minded” approach to the development of these minerals and will work together to develop these minerals in a “clean” and “fair” manner.
Canada is looking to build a battery industry as it expects the world to gradually shift away from fossil fuels within the next three decades. Batteries require minerals such as lithium, nickel and graphite, so the government has looked to boost its mining sector in recent years.
It also introduced a policy in 2022 that made it more difficult for foreign companies, especially “non-like-minded” nations, to purchase stakes in Canadian miners involved in producing these critical minerals. For instance, in 2022, it ordered three Chinese companies to divest its shares from three Canadian lithium companies.
Despite this policy, some Canadian junior miners have inked deals with Chinese companies in the last year. Montreal-based SRG Mining Inc. agreed to sell 19.4 per cent of the company to Carbon One New Energy Group Co. Ltd; Vancouver-based Solaris Resources Inc. inked an agreement with Zijin Mining Group Co. Ltd. to receive $130 million by way of a private placement of common shares; and Vancouver-based Osino Resources Corp. agreed to be bought by Yintai Gold Co. Ltd. for $368 million.
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The completion of all three agreements will depend upon the federal government’s approval based on the Investment Canada Act.
Australia miners have a big presence in Canada. For example, North American Lithium Inc., the only major lithium producer in Canada, is owned by Sayona Mining Ltd. and Piedmont Lithium Inc., both of which are listed in Australia.
Perth-based Wyloo Metals Pty Ltd., which is run by Australian billionaire Andrew Forrest, bought Canadian junior miner Noront Resources Ltd. in 2022. Wyloo is looking to build a nickel mine in Ontario’s Ring of Fire region.
Melbourne-based BHP Group Ltd. has agreed to invest $14 billion in Saskatchewan to build one of the world’s biggest potash mines. Another Australian mining giant, Rio Tinto Ltd., inked a memorandum of understanding with Canada last year to look for ways in which the miner can contribute to the country’s low-carbon battery industry during the next decade.
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“We will also work together with like-minded partners to respond to changing geopolitical realities so they do not negatively impact our pursuit of these goals,” a statement from Natural Resources Canada said.
• Email: nkarim@postmedia.com
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