Retired general calls for rejection of Chinese takeover of Arctic gold mine


Retired Major-General David Fraser says Ottawa should reject a $ 207.4 million takeover of the Hope Bay gold mine in Nunavut by a Chinese state-owned company.


A former commander of Canadian troops in Afghanistan urges the federal government to reject a Chinese state-owned takeover of an Arctic gold mine.

Retired Major-General David Fraser said the rejection should be part of a strategic thinking to keep China out of Canada’s Far North.

Prime Minister Justin Trudeau’s office recently ordered a formal national security review of the proposed acquisition of Toronto-based TMAC Resources Inc. by Shandong Gold Mining Co. Ltd., a Chinese state-owned conglomerate and the one of the largest gold producers in the world.

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A senior government official told The Globe and Mail that the Canadian military is opposed to the deal due to Beijing’s growing economic and military threat in the high Arctic. The Globe does not identify the official who was not authorized to publicly discuss the ongoing security review.

Mr Fraser said Ottawa should refuse the $ 207.4 million takeover, citing the mine’s location in Hope Bay, an entrance to the Northwest Passage, as well as its proximity to the mine’s facilities. early warning radar in Canada.

“This thing has a port attached to it. [China has] wrote an article saying they wanted to be a power close to the arctic. Well, that gives them real access to the Arctic, ”Fraser said in an interview.

“If you look at what they’ve done in the South China Sea to expand their area of ​​influence, what’s going to stop them, once they get the squatter rights and enter this port,” to do the same up there?

Climate change is making the Northwest Passage an increasingly attractive shipping route between the Atlantic and Pacific Oceans. The arctic route can reduce the shipping time for foreign ships traveling between Asia and Europe. The decrease in summer sea ice, a consequence of global warming, should facilitate transits by this route in the decades to come.

The mine site is just over 100 kilometers from a NORAD North Warning System radar station in Cambridge Bay, Nunavut, which is part of a chain of facilities across the north that collect information and forward them to military operations centers.

Fraser said Ottawa must also examine the transaction in light of how the authoritarian Chinese Communist Party has extended its control over public and private companies.

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The presence of Communist Party units in companies based in China has long been a fact of business in the Asian country, where companies, including foreign companies, are legally required to form a party organization. Earlier this year, however, the party issued a directive demanding greater loyalty from companies, saying they must “maintain a high degree of consistency” with the party regarding the political aspects of position, leadership and principles. Chinese companies are also required by law to spy on China if the central government so requests.

« [The Shandong] the company reports to the party in one form or another and then all of a sudden some people are on their staff… who would be looking at things other than mining, ”Fraser said. “Who says they couldn’t start snooping on us given [the various] strategic facilities that we have in the North?

Richard Fadden, director of the Canadian Security Intelligence Service from 2009 to 2013, told The Globe in May that Ottawa should look at the proposed TMAC takeover from a broader perspective of Canada’s national interests and strategy. Beijing aiming to take control of critical metals and minerals.

China is active in northern Canada in zinc, a key ingredient in the manufacture of galvanized steel, computers, cell phones and batteries.

MMG Ltd., whose major shareholder is the Chinese government, owns zinc and copper assets in the Izok and High Lake deposits in Nunavut. These deposits could be worth billions of dollars for China if Ottawa decides to build a road and a deep water port to ship zinc and copper through the Northwest Passage.

“We don’t need an economic enemy and a political enemy sitting here in my country, close to some of these sites,” Fraser said.

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John Higginbotham, who from 1989 to 1994 was Canada’s Commissioner to Hong Kong, a role equivalent to that of an Ambassador, is now an Arctic expert and senior researcher at the University’s Norman Paterson School of International Affairs. Carleton in Ottawa.

He said he was very concerned about what he calls the lack of Canadian leadership on economic infrastructure and security in the Arctic. The lack of new icebreakers, the scarcity of deep-sea ports, and the relatively limited industrial development in the Arctic contrast starkly with the military readiness and investment of Canada’s neighbors and competitors.

Russian President Vladimir Putin and Chinese President Xi Jinping have made big investments in liquefied natural gas energy exports from the Arctic, with ports, sea lanes, icebreaker tankers and huge breakers. nuclear ice that will eventually allow a year-round expedition, Higginbotham noted.

“There are developments going on all around the Arctic and we are the least developed country there,” he said. The north of Canada is “over-governed and underdeveloped” with a focus these days that is limited to environmental, social and housing measures, he said.

China’s views on Canada’s northern minerals have in part prompted a recent joint U.S. and Canadian government strategy to reshape global metal supply chains to reduce reliance on China, which has acted aggressively to control rare earth minerals which are essential to high tech and military products.

Canada still does not have any new icebreakers unlike Russia, which is building a fleet of 13 new polar icebreakers. Beijing has two medium-strength icebreakers and is building a larger and more powerful icebreaker as it seeks to use the Arctic as a shipping route and exploit minerals.

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Fraser said Ottawa must also have a greater military presence in the Arctic, including ongoing aerial surveillance operations using autonomous underwater vehicles and regular Navy and Coast Guard patrols. Canada is beginning to accept delivery of new Arctic and offshore patrol vessels, but they cannot operate in the Far North during winter and have limited icebreaking capacity.

He said the government was “asleep at the switch” when it came to asserting Canadian sovereignty in the Arctic.

Just before the 2019 election, the Liberal government announced a new Arctic strategy that listed climate change, health, infrastructure and economic development as key goals, but it lacked detail and lacked a calendar.

“The Arctic is an economic window and we have to put our stake in the ground and take possession of it to assert our sovereignty so that we can push back the Russians and the Chinese and all the others who are starting to use the region”, Mr. Fraser m ‘said.

With files from Reuters

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