(Bloomberg) -- Saudi Arabia’s mining minister doesn’t see any barriers preventing dealmaking by the Kingdom into Canada’s mining sector, despite government rules restricting investments from state-owned foreign entities.
“I have no reason to believe there will be an issue,” Minister Bandar Alkhorayef said in a Monday interview in Toronto, where he’s part of a Saudi delegation meeting with Canadian mining companies to discuss investment opportunities.
The minister of industry and mineral resources said he expects Saudi’s state-backed funds to buy stakes in Canadian metals businesses as the Middle Eastern kingdom expands its influence in the global mining industry. Canada’s rules targeting certain foreign investors won’t get in the way, he said.
Canada’s federal government introduced new rules in 2022 that added a layer of regulatory scrutiny to investments by foreign state-owned entities. Such deals will only be approved “on an exceptional basis” if they’re considered a net benefit to Canada.
The tougher stance has thwarted some efforts by Chinese state-backed firms to invest in Canadian companies, though it didn’t prevent two Saudi entities from buying a 10% stake in Vale SA’s base metals unit, which operates Canada’s largest nickel mines.
Saudi Arabia has sought to expand its access to critical minerals as the global energy transition accelerates, while building a metals-processing industry that could make it more attractive for international miners to exploit its mineral deposits — a central pillar of the kingdom’s efforts to diversify its economy away from oil.
Alkhorayef said his Canadian visit is partly to entice Canadian mineral explorers to help search for key metals like copper within the Arabian peninsula.
The Saudi delegation plans to meet with government officials in Ottawa including Industry Minister Francois-Philippe Champagne and Natural Resources Minister Jonathan Wilkinson, Alkhorayef said.
Canada-Saudi Arabia relations have been on the mend since a diplomatic feud broke out in 2018, when the Saudis expelled Canada’s ambassador after the Canadians criticized the kingdom’s record on human rights.
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