The Canadian government has stepped in to prevent the sale of rare earth materials from Vital Metals to Chinese buyer Shenghe Resources.
Australian-based Vital Metals mines rare earths at its Nechalacho mine in Canada’s Northwest Territories and will instead sell its stockpile to the Saskatchewan Research Council for C$3 million.
The deal, facilitated by Canada’s federal government, will prevent Vital Metals from advancing a deal initiated in December 2023 to sell the same stockpile of rare earths materials to Shenghe Resources for C$2.4 million.
"The government of Canada recognizes Nechalacho as a strategic asset that contributes to the country's prosperity and critical minerals goals," Vital Metals said in a statement.
“This sale is also beneficial in deriving value from our work at Nechalacho as we continue to advance the Tardiff rare earths deposit as a long-life, large-scale project with a scoping study to examine potential size and scalability of Tardiff on track for delivery by the end of 2024.”
The government-led deal is part of a broader strategy by the Canadian government to block Chinese firms from accessing its critical minerals sector, with tougher foreign investment rules introduced in October 2022.
It is closely scrutinizing deals between mining firms and Chinese government-linked companies, which can only be approved “on an exceptional basis.”