Canadian critical minerals companies will soon have to plan their financings around a suspensory, pre-closing national security filing regime, as Ottawa implements the 2024 Investment Canada Act amendments in early 2027. The new rules expand mandatory notification beyond acquisitions of control to certain minority investments and asset transactions in prescribed sensitive sectors, expected to include critical minerals production and supply chains, where the foreign investor gains specified rights.
The triggers are the rights that come with strategic stakes: access to material non-public technical information, access to material assets, and certain governance or special rights. Reviews would run before closing rather than after, with an initial screening period of at least 45 days and some national security reviews extending to 200 days, according to legal analysis of the regime. The minimum penalty for failing to make a mandatory filing will be 500,000 dollars, with the maximum to be set in the pending regulations. The prescribed sectors and exact triggering rights will be set out in regulations expected for consultation this fall.
The financing consequence falls on juniors. Canadian developers routinely fund exploration, feasibility work and construction with strategic minority investments from larger miners, battery makers and trading houses. “Canadian critical minerals companies will need to consider how they raise foreign capital,” Cassels partner Chris Hersh told Mining.com, pointing to longer timelines and structures such as staged tranches to manage the screening period.
Jurisdiction watch: the regime is Ottawa’s answer to a problem it has previously solved after the fact. In 2022 the government ordered three Chinese investors, Sinomine, Chengze Lithium and Zangge Mining, to divest from Canadian lithium and rare metals projects after those investments had closed. Pre-closing review is designed to prevent a repeat, and it formalises a pattern visible across allied jurisdictions: critical minerals capital is welcome, but its source and the rights attached to it are now screened as a matter of course. Whether the rules also catch Canadian companies whose mineral operations sit outside Canada remains an open question the regulations need to settle.