SRG Mining scraps $12.5 mln deal with China's C-ONE as Canada tightens scrutiny

Falcon Energy Materials

05/03/2024 17:55

March 5 (Reuters) - Graphite miner SRG Mining  SRG.V  on
Tuesday called off a C$16.9 million ($12.5 million) investment
deal with China's Carbon ONE New Energy Group (C-ONE) following
heightened scrutiny from the Canadian government.
    Shares of SRG Mining slumped 18.5% to C$0.44 in Toronto in
afternoon trading.
    "The conclusion to discontinue our transactions with C-ONE,
though challenging, was made with a clear focus on safeguarding
and advancing the interests of our shareholders and
stakeholders," SRG said.
    C-ONE, an anode materials company backed by Chinese
entrepreneur Yue Min, last year signed the C$16.9 million deal
for a 19.4% stake in SRG. The graphite miner last week said it
would incorporate in Abu Dhabi Global Markets while maintaining
its Canadian stock market listing.
    In 2022, the Canadian government proposed beefing up its
foreign investment rules to give it power to block or unwind
critical investments that pose a threat to national security.
    China has invested C$21 billion in Canada's mining industry
between 1993 and 2023. In 2022, Canada had ordered Chinese
companies to sell their stakes in three Toronto-listed lithium
firms.
    However, smaller mining firms, which produce lithium, nickel
and other green energy metals, are worried that such scrutiny
can limit their ability to raise funds.
        
($1 = 1.3569 Canadian dollar)

 (Reporting by Vallari Srivastava in Bengaluru; Editing by
Sriraj Kalluvila)
 ((Srivastava.Vallari@thomsonreuters.com;))