Chinese Investment in Northern Canada
Ten provincial and territory premiers wound up their Council of the Federation (COF) mission to China yesterday, the second since 2008. While in Beijing, they met with Chinese Vice-Premier Wang Qishan, Commerce Minister Chen Deming, top officials of the state assets commission and the National Development and Reform Commission, along with a vice-mayor of Shanghai.
Notably, they also huddled with the head of CNOOC on Canadian resources trade and investment at a time when the Harper government is reviewing the Chinese oil giant’s takeover bid for Calgary-based Nexen Oil. The bid has been ovewhelmingly approved by company shareholders but, as noted in earlier posts, is stirring up much debate over Chinese state corporate investment in the Canadian oil and gas sector.
In Hong Kong at the end of the trip, after meetings with Financial Secretary John Tsang and a visit to the Hong Kong Stock Exchange, Nova Scotia Premier Darrell Dexter, Chairman of COF, summed up by saying: “This mission has demonstrated to China’s business and political leaders that Canada’s provinces and territories value their collective and unique relationship with China. Increased trade with China means more jobs for Canada. The mission has already accomplished results for each of the provinces and territories…”
Premier Bob McLeod of Northwest Territories seemed most active among his colleagues, calling for a major boost in Chinese investment and trade with his jurisdiction. He encouraged more Chinese interest in metal and diamond mining, noting encouraging talks between rare metals specialist Avalon Resources and Chinese investors, co-development of new oil and gas fields, and Chinese help with hydro development along the MacKenzie River, while not forgetting the territory’s traditional strength in high-end wild furs.
“The Northwest Territories economy has been built on luxury items – furs, gold and now diamonds. Over time, mining became the driving force of our economy. Today our mineral resources are still our biggest asset and represent the best opportunity for China…(In terms of the traditional economy), China is one of the top buyers (of NWT fur). Demand from China has been increasing year after year, with buyers interested in mink, marten, arctic fox, and red fox”, he informed officials and businessmen in Beijing and Hong Kong.
Over the summer, Avalon Resources signed a landmark agreement with the Deninu First nation for an option to buy a small share of the company’s proposed rare earth mine at Thor Lake, about 130 km east of Yellowknife, paving the way for regulatory approval. Last February, Jinan-based Zhongrun International Co. bought nearly 9.62% of Canadian Zinc Corp. which is developing a new mine at Prairie Creek that has just cleared an environmental review.
Similar to SaskTel’s cooperation with Chinese telecom equipment giant Huawei to launch a fixed wireless service for voice and broadband in rural Saskatchewan, NWT’s Ice Wireless will be working over the long term with Markham, Ontario’s Iristel and Huawei Canada to provide 3G services to rural and remote communities throughout the MacKenzie Valley region.
Premier McLeod also toured Suntech’s solar panel manufacturing facility in Shanghai. Suntech is a world leader in solar panel design and manufacture. The NWT government is exploring the application of new energy technologies to ease the territory’s dependence on imported diesel as well as to lower its greenhouse gas emissions.
Meanwhile, Chinese investment has also flooded into neighbouring Yukon’s resource sector at the expense of Alaska, complained a US-based northern news service. Northern Cross, 60% owned by CNOOC, is actively drilling in the Eagle Plains area of northern Yukon. Yunnan Chihong Zinc and Germanium Co. entered into a JV with Selwyn Resources a couple years go to invest some $100 million to advance the Selwyn (lead/zinc) Project.
In 2008, Jiuduicheng Molybdenum Group Co. and Northwest Nonferrous International Investment Co. bought out Yukon Zinc that is developing its high grade poly-metal Wolverine Mine. The Yukon Council of First Nations is also talking to the Chinese about investment in their realms.
Not to be outdone, Advanced Explorations Inc., backed by investments of up to $1 billion in Chinese capital, is planning development of big iron ore deposit at Roche Bay on the Melville Peninsula in Nunavat that has the potential of producing 5.5 million tonnes a year. It will be the territory’s second giant iron ore mine. The JV partners are Xinxing Ductile Iron Pipes Co, one of the world’s largest makers of cast iron pipe, and China Huaxin International.
Similarly in northern Quebec, Wuhan Iron and Steel Co., China’s third largest steel works, has formed a JV with Adriana Resources Inc. to a develop an iron ore project. Quebec is also seeking Chinese investment to support the massive Plan Nord, a $80 billion, 25-year plan to develop the northern parts of the province.