(Yicai) Aug. 17 -- Shares of China Union Holdings fell after the property developer and manager said its acquisition of Argentum Lithium, an Argentine brine miner owned by a Chilean firm listed in Toronto, will face a security review by the Canadian government.

China Union [SHE: 000036] closed down 2.4 percent at CNY4.07 (60 US cents) in Shenzhen today, after earlier plunging as much as 8.2 percent.

China Union received a letter from the Canadian Foreign Investment Review and Economic Security on Aug. 14, saying that the FIRES will initiate a review within 15 days because the company's investment in Argentum Lithium may affect Canada's national security, the Shenzhen-based firm announced yesterday.

Last December, China Union signed a deal to buy Argentum Lithium from Lithium Chile and its President and Chief Executive Steve Cochrane for USD175 million. Lithium Chile is listed on Canada's TSX Venture Exchange.

With the deal, China Union would obtain an 80 percent interest in the Arizaro project in Argentina, while another lithium mining project in the exploration stage and a water extraction project owned by Argentum Lithium would be divested before the deal is closed.

Lithium Chile sent a letter to the FIRES in January, emphasizing that Argentum Lithium is not a Canadian company, it does not hold any Canadian assets, and has no employees or business premises in Canada, so it does not meet the national security review standards set by the Investment Canada Act, China Union said yesterday‌. Lithium Chile has not yet received any reply from the FIRES.

The Arizaro project includes six mining permits for the Arizaro lithium salt lake covering about 205 square kilometers, according to China Union. It has 261,000 tons of measured lithium carbonate equivalent, with total measured and indicated resources amounting to 2.5 million tons equivalent.

A pre-feasibility study for the Arizaro project has already been completed, China Union said last December, adding that the project will primarily produce lithium carbonate, an important raw material for lithium batteries.

Editor: Futura Costaglione