By Vipal Monga

TORONTO -- The purchase of a gold mine in the Canadian Arctic by a state-run Chinese company is triggering alarms in Canada over China's expanding presence in a region that is growing in strategic importance for its shipping lanes and resources.

Opposition parties and former government officials have called on Canadian Prime Minister Justin Trudeau's government to block Shandong Gold Mining Co., one of China's largest gold miners, from buying Toronto-based TMAC Resources Inc., whose operation is almost 120 miles north of the Arctic Circle.

Mr. Trudeau's cabinet has final say over the deal, but members of the Liberal Party government have stayed silent about it while it remains under review.

Opponents say Canada should block the deal to slow China's growing control over strategic minerals. They also want to stop China from buying more assets in the Arctic. U.S. military and foreign-policy officials have warned that China could assert itself in the sensitive region like it has in the South China Sea.

"This purchase should not go forward," said Richard Fadden, who was national security adviser to both Mr. Trudeau and former Canadian Prime Minister Stephen Harper. "They are clearly adversaries, and I think we have to take that into account every time they seek to buy something."

Although TMAC's shareholders and Chinese regulators have approved the deal, it needs to be reviewed by Canadian authorities. Under Canadian law, the government must review any acquisition by a foreign state-owned enterprise and can block it to protect national security, a term that is left undefined in the law to give flexibility to officials.

Shandong, which is controlled by the Shandong Provincial Government in China, said it is only interested in TMAC's commercial potential.

"We are a commercially focused company that is well known to the Canadian mining industry," said Jack Yue, director of corporate development and global investment. "The Canadian government will decide whether to approve this acquisition, but we see it as a straightforward gold-mining transaction."

A spokesman for Canada's innovation minister, who has responsibility over foreign-investment laws, said the department would review the deal and weigh its benefit to the Canadian economy before any approval. He declined to comment on any other aspect of the review.

A spokeswoman for Mr. Trudeau declined to comment.

Opposition to the deal comes with Canada-China relations at their lowest point in years following the 2018 arrest in Vancouver of Meng Wanzhou, chief financial officer of Chinese tech giant Huawei Technologies Co. Since then, China has imprisoned two Canadian nationals, Michael Kovrig and Michael Spavor, on espionage charges -- accusations that Mr. Trudeau has said were intended as retaliation.

The detentions have turned Canadian opinion against China. A majority of Canadians think their government should punish China by blocking Chinese investors from buying Canadian companies and denying entry to Chinese government officials, according to a poll by Nanos Research issued on July 13.

TMAC's Arctic location is particularly sensitive as countries jostle for access to the region, said Eric Miller, president of the Rideau Potomac Strategy Group, a consulting firm. "There are a huge amount of resources there, and China is a resource-hungry country looking for strategic access to minerals," he said.

TMAC's mining operation has access to tidewater leading to the Northwest Passage, a sea route connecting the Pacific and Atlantic oceans. TMAC now only has a jetty that allows barges to land, but TMAC has already proposed building a dock at the site to ease transportation, according to regulatory filings, and Shandong could use it to more easily supply the mine, said Jason Neal, TMAC's chief executive.

Global powers including the U.S., Russia and China expect the Arctic Ocean to become a critical shipping route as the polar ice melts, shortening travel between Asia and Europe.

Russia, which planted a flag on the Arctic Ocean floor in 2007, has the world's largest fleet of icebreakers and a large military presence in the region. The U.S. relies on its submarines to patrol the area and President Trump last month ordered the government to procure several more icebreakers to add to the single large one now on active duty.

Though China's northernmost point is more than 900 miles away from the Arctic Circle, it has declared itself a "near Arctic state" and gained observer status at the Arctic Council, whose members are the U.S., Russia, Canada, Denmark, Finland, Iceland, Norway and Sweden -- countries with territory in the region. In 2018, China published a white paper on Arctic strategy that foresees the building of a "polar silk road" trading route.

China has been methodically investing in the Arctic and wants to protect its access to the pole as an alternative shipping route, a deep source of minerals and energy resources and an alternative food source, said Heather Conley, a foreign-policy analyst with the Center for Strategic and International Studies, a Washington-based think tank.

Individual deals like the TMAC transaction may not seem troubling at first glance but become more questionable as part of a pattern of strengthening Chinese access to Arctic waters and establishing global dominance over industries like mining, she said.

"In an environment where there is such great distrust, it is more difficult to discern what is strategic or benign," she said.

The U.S. has become more vocal about its reluctance to let China have too much access to a region that borders Alaska. Secretary of State Mike Pompeo on Wednesday said Russia and China have become more aggressive in the Arctic.

"If they choose to go compete there, we can't turn the other cheek," Mr. Pompeo said, during a visit to Denmark.

Although it doesn't have any oversight authority on acquisitions in Canada, the U.S. Senate Energy and Natural Resources Committee has been tracking reports on the TMAC deal, said a committee spokeswoman.

Sen. Lisa Murkowski (R., Alaska), the committee's chairman, said China is consolidating control of mineral and precious metals supplies in the Arctic by investing in countries that border the region.

"We should recognize that, take it seriously, and make sure that our own focus and policies are up-to-date -- lest we similarly cede control of vital resources to economic competitors whose environmental and labor safety regulations may fall short of our own," she said.

Chinese companies have already purchased several assets in Canada's north. MMG Ltd., which is majority-owned by a Chinese state company, has zinc and copper properties in the Arctic and is lobbying the federal and local governments to fund the construction of a 200-mile road and a deep-water port on the Northwest Passage. Chinese-owned Jilin Jien Nickel Industry Co. Ltd. also owns a copper and nickel mine at the northern tip of Quebec.

"Actors from around the world are looking to be in a position to act more freely in the North. The federal government needs to play a role and act in the national and public interest," said John Williamson, a Conservative lawmaker on the House of Commons Special Committee on Canada China Relations who is in favor of blocking the deal.

For TMAC, the Shandong deal represents an important lifeline. If the acquisition isn't approved, TMAC has few options to raise enough capital to repay debt and continue operating, said Mr. Neal, the CEO.

Though its mines are considered by analysts to have attractive deposits, their location in the far north makes them expensive to develop. That is one of the reasons Shandong was the only bidder to emerge after TMAC contacted 76 companies about a possible deal, said Mr. Neal.

"Shandong has the opportunity and the ability to make a long-term investment," said Mr. Neal. "It's a good business deal for everybody. That's what we're focused on."

--Paul Vieira in Ottawa contributed to this article.

Write to Vipal Monga at vipal.monga@wsj.com