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Solaris cancels stake sale to Zijin Mining, cites government rules

Metals and Mining

Solaris cancels stake sale to Zijin Mining

The Canadian company Solaris Resources announced on Tuesday that it had canceled plans to sell a minority stake to Zijin Mining Group in China due to regulatory concerns.

Solaris announced in January that it will sell a 15% ownership in its Warintza copper mine in Ecuador to state-owned Zijin for C$130 million ($95 million). The Investment Canada Act was revised in late 2022 to give more scrutiny to foreign investments from state-owned firms in the mining industry, requiring approval for the deal.

Earle stated that regulatory uncertainty in Canada and heightened political sensitivity at home caused the company's share price to underperform compared to its peers.

The stock on the Toronto Stock Exchange dropped 0.4%, while the benchmark Canadian share index went up 0.3%.

According to a research note from RBC Capital Markets, the deal's cancellation eliminates regulatory uncertainty and the transaction's dilute value.

The Canadian government takes a strong stance on Chinese investments in important minerals such as lithium, graphite, and copper. Canada asked SRG Mining to cancel a planned investment from China's Carbon One New Energy Group earlier this year.

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