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Some observers, including former director of the Canadian Security Intelligence Service, Richard Fadden, had urged Ottawa to review the TMAC transaction given Beijing’s growing interest in strategic minerals.
Security experts have long warned of the risks of foreign takeovers by Chinese state-owned companies, which have sometimes been asked to defend the interests of the Chinese Communist Party. These concerns were raised under the leadership of Chinese President Xi Jinping, who has actively sought to expand the country’s geopolitical interests through the acquisition of foreign strategic assets.
As for the Nunavut mine, the rejected takeover now leaves the company with big questions as to who else might step in to buy the asset.
In an interview with the Financial Post this week, TMAC’s TMAC chief executive Jason Neal said the rejection at least underscored the project’s high status.
“The only thing I would say is that in taking action, the government has made it clear that what we have built in Nunavut it considers important to Canada,” he said. “You know, it’s a ray of hope.”
But Neal also said he believes the government should give more support to infrastructure companies in Nunavut and other parts of the Arctic.
His company had announced a strategic review of the mine in January. Based in Nunavut, the company faced high operating costs as all of its supplies must be shipped by air or sea.
These costs were exacerbated by a factory that never operated at the expected level, resulting in lower gold recovery and production and difficulty in repaying debt.
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