The possible acquisition of The Hope Bay gold mine owned by TMAC Resources Inc. by the Chinese mining company Shandong Gold signals that China wants to make money in the Canadian Arctic, says Michael Byers, a legal scholar and author of “Who Owns the Arctic”?
The latest news that TMAC Resources Inc.,a Canadian mining company in western Nunavut, plans to sell its Hope Bay gold mine to a giant Chinese mining company, Shandong Gold, has alarmed some Nunavut residents.
That’s understandable, but Shandong Gold, better known as SD Gold, just wants to make money, says Michael Byers, a legal scholar who holds the Canada Research Chair in Global Politics and International Law at the University of British Columbia and who is author of the book “Who Owns the Arctic?”.
While general concerns about the likely sale of the mine to the Chinese-controlled company are justified, the acquisition of Hope Bay looks more like a good deal than a challenge to Canadian sovereignty, Byers said. Many Canadian mining companies are now open to foreign takeovers due to the collapse of the economy and commodity prices as a result of the COVID-19 pandemic.
At the same time, many Chinese companies, such as SD Gold,have a lot of capital and are resilient to the downturn,” he said. SD Gold is willing to pay 207.4 million dollars for Hope Bay, which produced about 32,290 ounces (915.5 kg) of gold last year.
“China has a ‘massive appetite for natural resources’ such as gold. But nowadays, there is great concern about China’s power and its international politics. We are dealing with a pandemic that originates in China, and we have a few Canadians imprisoned in China, and at the same time we have China, which is becoming the most powerful economic power in the world.” Byers said
“So if you put the fear of China above the fear for the Arctic, many people will be very sensitive. I think that’s the reason for a lot of concern – it’s the perception that a foreign power could take over our Arctic,” Byers added.
Gold is not a “product of national security”, such as rare earths or lithium with its high-tech applications in the fields of energy, transport and telecommunications. Gold is an investment product, so there is “no immediate national security issue,” Byers said.
“Canadians are rightly concerned about China in the Canadian Arctic, but my message is that this is not a situation where we should say “No” to everything Chinese companies want to do. In this situation, we should be vigilant and examine the proposal carefully and impose conditions and restrictions, which we then enforce. If everyone is cautious, there could be benefits from Chinese investment. Canada has economic relations with more than 100 countries, and not all of them have been democratic,” he said.
TMAC in distress
Earlier this year, TMAC announced that the search for a buyer for its mining operation would provide the necessary money for the mine’s development. The company is in even greater trouble because of the pandemic, as it has sent its Nunavut-based workers home, reduced its workforce to 120 employees, and reduced its production to processing stored ore.
TMAC said on May 12 that SD Gold “has the financial strength, technical skills and long-term vision to maximize the value of the Hope Bay property.” Without the deal with SD Gold, the mine could cease operations, which would be a loss for Nunavut’s workers, companies, Inuit organizations, and governments.
“If the risk of COVID-19 persists, TMAC could make a controlled transition to temporary maintenance and control, and the resumption of full operations would likely begin with a period of rebuilding of the ore deposits,” Jason Neal, TMAC’spresident and chief executive officer, said in a press release this week.
Heiner Kubny, PolarJournal