A prominent U.S. cybersecurity firm is alleging that Chinese government-funded campaigns are spreading disinformation about Canadian rare earths miner Appia Rare Earths & Uranium Corp. in an attempt to cement China’s dominance in the sector and crush Canadian ambitions.
Virginia-based Mandiant Inc., which was founded by former U.S. government security experts, said in a report that Toronto-based Appia and two other rare earth companies, Lynas Rare Earths Ltd. LYSDY and USA Rare Earth LLC, were targeted by an online network called Dragonbridge, a front for the People’s Republic of China (PRC).
“Since rare earths mineral mining is of strategic significance to the PRC, and these entities are challenging the PRC’s global market dominance in that industry, our experts believe Dragonbridge is targeting this sector to maintain its advantage,” Mandiant wrote in an e-mail to The Globe and Mail.
Rare earths are used in a range of high-tech, clean technology and military applications. They are mined in vanishingly small quantities compared with bulk commodities such as copper. According to the U.S. Geological Survey, China controls about 80 per cent of the rare earths industry, while Canada currently only has one small rare earths mine in operation.
In June, following encouraging drilling results at Appia’s Saskatchewan rare earths project, several Twitter accounts that Mandiant said came from Dragonbridge blasted out negative commentaries attempting to stir up public contempt. “The idea of extracting rare earth elements from abandoned mines is terrifying,” Gonzalez Bonnie wrote on Twitter. “Our lakes will be destroyed,” @Farrah72032130 said.
Tom Drivas, chief executive officer of Appia, said he hadn’t been aware of the tweets until Mandiant brought them to his attention. Appia’s share price has fallen significantly since June, but Mr. Drivas wasn’t sure whether the posts played a role. He urged investors to look only at his company’s regulated documents on SEDAR, and not rely on posts on social media.
Dragonbridge also targeted Australia’s Lynas Rare Earths earlier in the year, to try to whip up support to protest the construction of a rare earths processing facility in Texas, Mandiant said. The posts on Facebook and Twitter, which Mandiant believes originated in China, were designed to appear as if they were posted by local U.S. residents.
Someone with the handle Teri Cox wrote on Twitter in April that Lynas dumps toxic radioactive waste. “Residents of Texas should not tolerate this, or [our] children will be affected,” she wrote.
John Hultquist, vice-president, threat intelligence, at Mandiant said in an interview his firm has been monitoring Dragonbridge’s activity since 2019, when it started off as a Chinese organization aiming to undermine democracy proponents in Hong Kong. Only recently has Dragonbridge started targeting the private sector and zeroing in on critical minerals.
“If you’re a company, now you may have to worry about a well-resourced actor pushing disinformation, or essentially trying to undercut you politically, or attack your brand,” Mr. Hultquist said. “That’s a whole new type of threat for most companies.”
The attacks on a Canadian company come after Ottawa recently signalled it intends to crack down on Chinese encroachment into the critical minerals sector. Earlier this month, Minister of Natural Resources Jonathan Wilkinson told The Globe the government is set to take a far more protectionist trade stance against China.
Since the early 2000s, Chinese state-owned companies have invested billions abroad to secure long-term supplies of critical minerals. For the most part, Ottawa has taken a laissez-faire approach, allowing Chinese acquisitions of Canadian critical minerals companies, permitting Chinese companies to take large stakes in critical minerals mines and allowing Chinese companies to buy offtake agreements that allow them to control the metals produced by Canadian companies.
Earlier this year, the Liberal government came under fire for allowing the sale of Canadian lithium development company Neo Lithium Corp. to Chinese state-owned Zijin Mining Group Co. Ltd. without conducting an in-depth security review.
Mr. Wilkinson told The Globe earlier this month that the government will be “very thoughtful” from now on about what it is willing to allow, and indicated that stricter controls are coming, not only over attempted Chinese acquisitions of Canadian critical minerals assets, but over offtake agreements as well.
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