Canada woos mine partners from China

Canada woos mine partners from China

GEOFFREY YORK, Toronto Globe and Mail

15th November 2006

BEIJING -- In a renewed effort to woo Chinese mining money, Canada is handing out stacks of detailed geological maps and data sheets to anyone who wanders past its booth at the annual China mining conference in Beijing.

The maps -- giving the precise locations of everything from copper and gold finds to uranium and zinc deposits -- were quickly snapped up by the scores of Chinese mining executives who crowded around the Canadian booth yesterday.

It was a clear signal that the new Conservative government in Ottawa is throwing open its doors to Chinese miners, despite the political furor over a failed Chinese corporate bid to acquire Noranda Inc. in 2004.

While in opposition, Tory MPs questioned the Chinese bid for Noranda, suggesting that it should be blocked because of possible human rights abuses by China Minmetals Corp., the state-owned company that spearheaded the bid.

Those concerns seem to be forgotten now. Gary Lunn, the federal Minister of Natural Resources, made a strong pitch to Chinese mining executives yesterday. "I would like to encourage Chinese investment in Canada," he told the mining conference in Beijing.

"Partnering with Canadian companies can help you secure the minerals and metals that China needs to fulfill its economic development," he said. "We invite Chinese mining companies to jointly explore and develop these and other deposits in Canada."

After the failed bid for Noranda, many Chinese investors were convinced that the deal was killed by hostile politicians in Ottawa. For a long time afterward, this perception cast a negative shadow over China's potential interest in investing in Canada. It's a perception the Conservative government now seems keen to dispel.

"We're absolutely trying to attract investment, we think it's important, and we made that point in a number of meetings here," Mr. Lunn said in an interview yesterday. "We've had some very positive discussions. We think the model that works very well is to partner with a Canadian company. That's what we've said in all of our meetings, and it's been well received."

He refused, however, to discuss the ramifications of the Noranda bid. Nor would he explain whether "partnering" could include any future Chinese acquisitions of Canadian companies.

Provincial politicians, too, are trying to lure mining investment from China. Two provincial cabinet ministers -- from B.C. and Saskatchewan -- are scheduled to speak to the conference today.

"As China's economy continues its fast pace of growth . . . its need for natural resources will increase," Saskatchewan Industry and Resources Minister Eric Cline says in the text of a speech he is due to deliver today. "Saskatchewan has those resources and is a trading jurisdiction. I look forward to increasing our already close ties to China."

Canadian miners, meanwhile, are increasingly active in developing projects in China. But there are still widespread concerns about Chinese barriers to investment, including the difficulty of converting an exploration licence into a mining licence after a foreign investor discovers a large mineral deposit. Mr. Lunn said he raised this issue yesterday in a meeting with China's Minister of Land and Resources.

"It's in their interest and our interest that we create certainty for the mining industry. But we've seen progress in foreign investment protection, especially at the central government. The difficulty seems to be especially with the local governments."