Canada on Wednesday ordered three Chinese companies to divest their stakes in Canadian rare earth minerals companies, citing "national security" reasons.

The companies ordered to divest their holdings are Sinomine (Hong Kong) Rare Metals Resources Co Ltd, Chengze Lithium International Limited and Zangge Mining Investment (Chengdu) Co Ltd, a statement said.

Canadian national security and intelligence agencies conducted "rigorous scrutiny" of the companies before the decision was made, said Francois-Philippe Champagne, minister of innovation, science and industry.

"While Canada continues to welcome foreign direct investment, we will act decisively when investments threaten our national security and our critical minerals supply chains," Champagne said.

Rare earth minerals are considered essential for green technologies of the future, and already have uses in electronics, aerospace, automotive and defense industries.

The announcement came five days after Canada tightened its rare minerals investment regulations for foreign state-owned enterprises, allowing investment only "on an exceptional basis."

Ottawa has created a list of 31 so-called "critical minerals" it deems vital to its own economic prosperity, including cobalt, lithium and manganese used in solar panels, wind turbines and electric vehicle batteries.

Over the past two decades, China, the world's largest producer of rare earth minerals, has invested billions of dollars in Canada to secure a supply of rare metals.