Canadian critical mineral shares fall after tighter M&A criteria
Adds comment from TSX in paragraph 3
By Divya Rajagopal
TORONTO, July 8 (Reuters) -Shares of Canadian companies that mine critical minerals such as copper and uranium fell on the Toronto Stock Exchange (TSX)on Monday as investors assessed the potential impact of Canada's announcement last week that it would restrict large mergers and acquisitions in the sector.
Last Thursday, Industry Minister Francois-Philippe Champagne cleared London-listed Glencore's GLEN.L takeover of the coal unit of Teck Resources under strict conditions after taking into account the "net benefit" that the deal would carry for Canadians. But he added Canada in future would allow large mergers and acquisitions in the sector only under the "most exceptional circumstances."
Champagne said the ministry would set a high bar for clearing deals involving large Canadian companies in the critical minerals sector, reflecting the strategic importance of critical minerals and the need for Canada to protect its interests.
Dean McPherson, head of global mining at TSX, said the government's announcement was not a "positive development," describing the new policy as "concerning."
On Monday six critical mineral companies were among the top losers in opening trade on the Toronto Stock Exchange. Copper miners, including Capstone Copper CS.TO Hudbay Minerals HBM.TO, Teck Resources TECKb.TO, First Quantum Minerals FM.TO, Ivanhoe Mines IVN.TO were all down by over 3% around 1 p.m. Eastern Time, while uranium miner Cameco Corp CCO.TO was down 2.13%.
"This updated policy significantly compresses M&A optionality and potentially restricts financing options for Canadian miners. As a result, we now anticipate most Canadian miners to trade at lower valuation multiples vs. global peers," said an analyst note led by Scotiabank analyst Orest Wowkodaw.
Canada has identified 31 minerals, including copper, uranium, lithium and nickel, that it considers critical for their strategic uses in modern technology and the transition from fossil fuels, such as in electric vehicle batteries.
"The door has not been closed but narrowed even further on investments in critical minerals," said Calvin Goldman, former head of Canada's Competition Bureau, who now runs an independent practice on advising clients in foreign investments. "So business community, get ready because you have to be fully prepared, as now they have to satisfy increasingly quiet strict criteria," Goldman added.
Under the Investment Canada Act, the government can reject a proposed acquisition or inbound foreign investment if the government believes the deal represents a threat to national security or if it fails to satisfy the criteria for bringing a "net benefit" to Canadians.
In the last two years, Canada has asked Chinese investors to divest from Canadian critical mining companies after a national security review, signaling that investments from certain countries such as China will come under tougher scrutiny.
Some of the largest investors in leading Canadian copper companies are Chinese. Teck Resources counts China Investment Corp as its biggest shareholder. First Quantum's largest shareholder is China's state-owned copper miner Jianxi Copper 600362.SS and Ivanhoe Mines has Hong Kong-headquartered CITC Metal Group has its leading shareholder.
Reporting by Divya Rajagopal; Editing by Frank McGurty
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
