Lithium Chile (TSX-V:LITH) and China Union Holdings (SZSE:000036) have received notice that their proposed US$175 million ($246.23 million) Argentum Lithium transaction could pose a risk to Canadian national security.
Under the transaction, announced in December 2025, China Union will acquire all outstanding shares in Lithium Chile’s Argentine subsidiary Argentum Lithium, which holds its interest in the Salar de Arizaro Lithium Project. The sale remains subject to closing conditions.
The notice, issued under Subsection 25.2(1) of the Investment Canada Act, states that the director of investments has reasonable grounds to believe the transaction could be injurious to national security. It also advises that an order for a further review may be made.
Lithium Chile wrote to Innovation, Science, and Economic Development Canada on 7 January 2026 arguing the transaction falls outside the legislation’s scope.
The company says Argentum is not Canadian, owns no Canadian assets, and has no employees or place of business in Canada. Lithium Chile did not receive a response before the notice was issued.
Lithium Chile and China Union are reviewing the notice with their respective legal advisers and considering their options.
The Canadian exploration company also maintains that the sale of a foreign asset is outside the department’s jurisdiction and says it intends to “forcefully advance that position and seek all remedies available”.
The notice introduces another source of uncertainty for the proposed divestment, although a further national security review has not yet been ordered.
Lithium Chile has completed a national instrument 43-101-compliant resource report, preliminary economic assessment, and Prefeasibility Study for Arizaro. The Canada-based exploration company has 11 properties covering 106,136 hectares in Chile and 29,245 hectares at Salar de Arizaro in Argentina.
Write to France Pinzon at Mining.com.au
Images: Lithium Chile
