Winnipeg Free Press

Winnipeg Free Press (Newspaper) - August 12, 2024, Winnipeg, Manitoba MONDAY, AUGUST 12, 2024 A4 ● WINNIPEGFREEPRESS.COM NEWS I LOCAL / WORLD PHOTOS BY JOHN WOODS / FREE PRESS BORA! LET’S GO! Performers at the Brazilian pavilion open up the second week of Folklorama at the RBC Convention Centre Sunday. Chinese mining firm subsidiary disputes Ottawa’s review of Peruvian gold mine deal A SUBSIDIARY of a Chinese state-owned mining firm says Canada is wrongly consid- ering a national security review in its agreement to purchase a gold and copper mine in Peru. In May, Vancouver-based Pan American Silver Corp. announced an agreement worth almost US$300 million to sell its stake in Peru’s La Arena gold mine to Jinteng (Singa- pore) Mining, a subsidiary of China’s Zijin Mining Group. Pan American said then that the agreement was “subject to custom- ary conditions and receipt of regula- tory approvals.” Since then, however, Canada’s In- dustry Minister François-Philippe Champagne has found the agree- ment “could be injurious to national security” and told the company in late June that he “may” order a for- mal review under the act. Certain types of foreign invest- ments involving Canadian compan- ies are reviewed on national secur- ity grounds and Jinteng voluntarily notified the Director of Investments at Innovation, Science and Econom- ic Development Canada shortly af- ter the agreement was announced. The federal government main- tains a list of nearly three dozen critical minerals “essential to Can- ada’s economic or national secur- ity,” and reviews of investments in- volving foreign companies like Zijin are a protective measure to main- tain Canadian control of materials essential to “the green and digital economy.” Zijin is partially owned by the Chi- nese government and overseen by members of the Chinese Communist Party. Canada’s Critical Minerals Strat- egy outlines how allies in Europe have “experienced the conse- quences of dependence upon non- like-minded countries for strategic commodities.” Jinteng claims in a judicial review application filed in Federal Court in late July that the minister “lacks jurisdiction under the act” to order a national security review of the La Arena deal. “The targets are Peruvian en- tities. They do not have a place of operations in Canada or otherwise carry on operations in Canada, they do not have individuals in Canada who are employed or self-employed in connection with their operations, and they do not have asset in Can- ada used in carrying on their oper- ations,” the application says. National security experts have warned of the geopolitical conse- quences of letting foreign actors scoop up Canadian companies in the sector and Jinteng’s actions to skirt the national security review process represent a test of Ottawa’s reach on companies incorporated in Canada, but that have no domestic operations and exist only to hold foreign assets. Despite the voluntary notifica- tion sent to Ottawa about the deal, Jinteng claimed it doesn’t involve a “Canadian business” as defined by the act because the target com- panies and their assets are in Peru, though they’re owned by Pan Amer- ican subsidiaries incorporated in B.C. and Ontario. The company claims in its appli- cation that the minister’s decision is “based on an untenable and un- reasonable interpretation of the act and is therefore wrong in law.” Aaron Shull, managing director and general counsel at the Centre for International Governance In- novation in Ontario, said the case presents a “fairly complicated story that is actually quite simple.” He said the deal boils down to a Canadian parent company sell- ing Peruvian assets to a Chinese company and the structure of the subsidiaries involved could be for various reasons such as shielding liability and tax purposes. Shull said the Canadian govern- ment has indicated its intention to scrutinize and “get tougher on” for- eign investments involving things like strategic minerals involving “hostile states.” “Especially from state-owned en- terprises or enterprises that are so closely affiliated with the state,” he said. The deal, he said, is not only for gold mining assets, but also for a nearby gold-copper mine and a power transmission facility. “You could probably make a fairly compelling case that this is part of a strategic play on China’s part in Lat- in America,” he said. “The Canadian government, the American government, a whole bunch of others have been making a lot of noise about being tougher on this type of stuff. I think that’s what you’re seeing here is the kind of im- plementation of that sabre rattling in this kind of contested geopolitical environment.” Jinteng’s Canadian lawyers did not respond to a request for com- ment. Innovation, Science and Economic Development Canada also declined to speak about Jinteng’s Federal Court application. “The Government of Canada does not comment on matters before the court. Due to confidentiality provi- sions of the Investment Canada Act, the Government cannot comment on specific transactions,” the agency said in an emailed statement. The federal government an- nounced “significant changes” to the act in March this year. “While foreign investment is es- sential to economic prosperity, the Investment Canada Act is a key lever that allows the government of Canada to act quickly and decisive- ly when foreign investment would threaten national security,” the de- partment said at the time. “As the world changes and threats evolve, Canada needs new tools to continue protecting the economy and keeping Canadians safe.” Shull said the case documents don’t indicate what specific national security concerns the minister may have, but said he’ll be watching the case closely for the outcome. He said if the company’s success- ful in staving off a national security review, it would put Canada in an “odd spot” by potentially giving for- eign companies a means of structur- ing deals outside of the legislative regime with “just a bunch of cre- ative lawyering.” The underlying issues beyond the specifics of the case involve the intersection of national security, prosperity and economic security, which “we tend not to think about … in a strategically integrated fashion in this country,” Shull said. “It’s part of a much bigger puzzle,” he said. “The primary concern that I have is that hostile states and stra- tegic adversaries are looking at this stuff in an integrated way.” Champagne said when announ- cing the changes in March that Can- ada is a “top destination for foreign investment worldwide.” “While our government is com- mitted to working with businesses to attract investments and to create greater economic opportunity for all Canadians, we will not hesitate to take action on transactions that could harm Canada’s national and economic security,” he said. — The Canadian Press DARRYL GREER Two people killed in house explosion BEL AIR, Md. — Two people were killed and 12 families displaced after a Maryland house exploded Sunday amid reports of a possible gas leak, fire offi- cials said. Neighbours described feeling and hearing the early morning blast that damaged a number of surrounding houses in Bel Air, a town about 50 kilo- metres northeast of Baltimore. Firefighters were called to the area around 6:40 a.m. for a report of a gas leak and an outdoor odour of gas, said Oliver Alkire, a master deputy with the State Fire Marshal’s Office. Alkire said that as firefighters were approach- ing, they began receiving calls that the house had exploded. First responders pronounced one person dead at the scene, and a second body was later found in the rubble. Alkire said that a home next door to the explosion was heavily damaged, and a woman in that house was treat- ed for injuries on the scene. Two utility workers were in the area to work on a reported electrical issue, but author- ities didn’t immediately say if that was related to the explosion. The first victim found was later iden- tified as a contractor for the utility BGE, according to a statement released by Harford County Fire and EMS. The State Fire Marshal’s Office said late Sunday that the second body was found in the rubble of the home at the center of the blast. The person is be- lieved to be the home’s 73-year-old owner, but positive identification was pending, according to the fire officials’ statement. Investigators were also working to establish how many houses were dam- aged and how far the blast radius was. Harford County fire officials said that at least 12 families have been displaced due to damage to neighbouring houses. Authorities said there was no ongoing threat to the public. “I’ve been on the job for nearly 18 years, and this is one of the largest ex- plosions I’ve seen,” Alkire said. A photo posted by county officials showed several firefighters around the rubble of the home with another dam- aged home in the background. Charred pieces of wood were heaped on the property, and insulation and splintered wood spilled out into the street. Small pieces of debris hung from nearby trees. Later in the morning, emergency workers were seen using heavy equip- ment to search through the rubble. — The Associated Press ;