What’s going on here?

Jinteng Mining, a subsidiary of Zijin Mining Group, has taken legal action to counter Canada’s review of its $245 million purchase of a gold mine in Peru.

What does this mean?

In May, Jinteng Mining acquired the gold reserves of Pan American Silver Corp. asset in Peru for $245 million, with an additional $50 million payment option. But the deal stalled when Canadian minister Francois-Philippe Champagne called for a national security review. In response, Jinteng Mining filed a judicial review in Canada’s Federal Court in late July, with the Attorney General and the Minister of Innovation, Science and Industry named in the case. This legal move, handled by law firm Gowling WLG LLP, could set a precedent for Canadian firms dealing with Chinese investments under tight regulatory scrutiny.

Why should I care?

For markets: Security versus investment.

Canada’s tough stance on investments by Chinese state-owned companies in critical minerals has increased regulatory risks for cross-border deals. Since 2022, the country has been scrutinizing such investments on national security grounds, particularly in key minerals such as copper, lithium and nickel. Although gold is not on Canada’s list of 31 critical minerals vital to technology and energy, Jinteng Mining’s lawsuit underscores the growing friction between security concerns and investment opportunities.

The overall picture: Set the bar high.

Canada’s Industry Minister Francois-Philippe Champagne stressed in July that large M&A deals in critical minerals are subject to strict approval standards and only take place under exceptional circumstances. This case could affect future policy measures and the dynamics of global investment, particularly as countries must balance economic interests with security needs. The outcome could change the playing field for foreign investment in Canada and affect how deals are approached and evaluated.