Government’s decision not to review lithium company takeover a ‘mistake’: expert

OTTAWA — An intelligence expert said the federal government’s decision not to conduct a formal national security review on the takeover of a Canadian lithium mining company by a Chinese state-owned company was a “mistake.”

The government misjudged the takeover’s significance to Canada’s economic and national security both in the present and future, said Wesley Wark, a visiting professor at the University of Ottawa who specializes in international affairs and intelligence gathering.

“The kinds of explanations that have been offered by the government to date I find wholly unsatisfactory and very narrowly focused,” he told a House of Commons committee Wednesday.

Wark delivered his remarks at the first of two Commons committee meetings to explore the takeover of Neo Lithium Corp. by China’s Zijin Mining Group Ltd. and whether a formal national security review should have occurred.

Liberal MP Andy Fillmore, parliamentary secretary to Industry Minister François-Philippe Champagne, told the committee last week that the Industry Department reviewed the proposed takeover last fall.

The department concluded that Neo Lithium is “really not a Canadian company,” Fillmore said, describing it as an Argentine company with directors in the United Kingdom and only three Canadian employees “on paper.”

Wark noted that the government had the option to extend the review by an additional 45 days, which it did not take. 

“To be honest, I’m dumbfounded by the fact that the government was so confident about its conclusions within that 45-day period from the original announcement of the acquisition in October through to early December that it felt it didn’t even have to do any more,” said Wark.

He said he believes the postelection political transition period had an impact on the attention the case should have been given.

While the decision “cannot be undone,” it offers important lessons for similar reviews in the future, such as considering economic strategy in the review, and performing these reviews more often, Wark said. 

He also said in fairness to officials involved, reviews of investments like these are resource-intensive and highly complex.

This report by The Canadian Press was first published Jan. 26, 2022.

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This story was produced with the financial assistance of the Facebook and Canadian Press News Fellowship.

Erika Ibrahim, The Canadian Press