‘Conflict of interest’: experts share concerns of U.S. stakes in Canadian miners

The U.S. government is increasingly taking stakes in publicly traded companies, including Intel and Canadian-based miners Trilogy Metals and Lithium Americas, giving rise to concerns over the potential for conflict of interest issues to surface.

Richard Leblanc, a professor of governance, law and ethics at York University, said it’s unusual to see a foreign government take a stake in a Canadian company.

“It is uncommon for a government to have a stake in a domestic company, but it’s even more uncommon for a foreign government,” he said.

Vancouver-based metal exploration company Trilogy Metals Inc. announced on Monday that the U.S. government would acquire a 10 per cent stake for US$35.6 million, with an option for more in the future. It also has the right to appoint a member to the company’s board. Trilogy has mining interests in Alaska that Washington wants to see developed.

On the same day, U.S. President Donald Trump signed an executive order directing a road to be built in Alaska, allowing access to the Ambler mining district, an area rich in copper where Trilogy has an interest through a joint venture.

Leblanc questioned the efficacy of a company having a major shareholder that also has the authority to make crucial decisions that could change the investment landscape for it through regulations or other policy decisions.

“To have an outside investor who can have regulatory approval, is that a conflict of interest? It absolutely is a conflict of interest,” he said.

“(Other) shareholders do not have the power to have regulatory approvals, so what this creates is a super shareholder.”

The Trilogy news came on the heels of another Canadian company being added to Washington’s portfolio.

Last week, the U.S. government said it was taking a minority stake in Lithium Americas, another Canadian-headquartered company that is developing one of the world’s largest lithium mines in Nevada.

As the move regarding the U.S. administration acting as both investor and regulator faces criticism, some observers noted it seems to be part of a trend. Mounting geopolitical competition for minerals key to priorities like a carbon neutral economy, AI hardware and defence means governments are watching the mining sector more closely.

Sara Ghebremusse, an assistant professor at the Allard School of Law at the University of British Columbia, said she “absolutely” thinks there are conflict of interest concerns stemming from the U.S. government’s most recent stakes in Canadian miners.

“But I don’t think that’s a concern of the Trump administration right now. Appearances of conflict of interest, and even real incidents of conflict of interest, I don’t think the U.S. administration is currently concerned about that right now,” she said.

Leblanc said it is important to have separation to guard against instances where the interests of a company may not align with those of the U.S. government as shareholder or regulator.

“It introduces the capacity for unequal treatment of Canadian shareholders vis-a-vis an American shareholder who’s also a regulator,” he said.

In the case of Trilogy Metals, Leblanc noted the U.S.’s stake would make it one of its largest investors, which could have implications for its board.

“A large shareholder like the U.S. government could influence the board, either directly or indirectly. And directly would be to nominate someone onto the board,” Leblanc said.

“If or when that happens, the discussions in the boardroom change because you now have a shareholder-nominated director. For all intents and purposes, the U.S. government could be regarded as an activist shareholder.”

Despite the risk of influence, Ghebremusse said she doesn’t expect transactions of this kind to be a significant concern for the Canadian government.

“A 10 per cent stake in a Canadian mining company by the U.S. government is not outside the bounds of what would be acceptable foreign ownership in Canada,” she said.

Meanwhile, Leblanc said the Canadian government should scrutinize the Trilogy Metals transaction “with great care,” given the renewed importance of critical minerals to economic security.

“This could be a test case for what the Canadian government is prepared to accept. If we find that this is acceptable, then I wouldn’t rule out investments by the U.S. government in other critical Canadian companies,” he said.

“That would also have implications for Canadian sovereignty, for Canadian defence, for our ability to govern our own Canadian companies.”

The U.S.’s investments in the Canadian mining industry come after it took a 10 per cent stake in American tech giant Intel in August and a roughly 15 per cent stake in rare earth miner MP Materials in July.

Adam Fremeth, an associate professor at the Ivey Business School, said there is a growing trend over the past decade of countries investing in private firms as part of industrial policy.

“One of the things that allows to happen is the de-risking of investment. That government ownership can bring with it the ability to lower cost of capital. To lower downside risks that a firm may be facing,” he said.

“And we see some of that discussion going on right now with regards to the infrastructure projects that are being pitched at both a federal level and a provincial level in Canada.”

While direct state intervention in resource companies has historically been uncommon in Canada and the U.S., Ghebremusse pointed to examples of state-owned companies in China. She also highlighted instances of states acquiring stakes in foreign-owned mining projects in Africa and Latin America.

She said the fresh enthusiasm for critical minerals is “almost akin to the gold rush” with companies, sometimes supported by countries, trying to stake their claim.

“You see right now, a lot of Western countries looking to at least catch up and be in a position to compete with China for access to critical minerals,” she said.

This report by The Canadian Press was first published Oct. 10, 2025.

Companies in this story: (TSX:TMQ, TSX:LAC)

Daniel Johnson, The Canadian Press