Mining industry applauds the Canadian government for new trade agreements in Africa
FIPAs will help protect and promote Canadian mining investment in Tanzania and Guinea
OTTAWA, Dec. 9, 2013 /CNW/ - The Mining Association of Canada (MAC) commends the federal government on the signing of two new Foreign Investment Promotion and Protection Agreements (FIPAs) with Tanzania and Guinea. The FIPA with Tanzania came into force earlier today, while the negotiations with Guinea concluded on December 5, 2013.
"Given the global nature of our sector, the Canadian mining industry is highly supportive of the formation of new investment agreements," said MAC's President and CEO, Pierre Gratton. "The recently announced FIPAs with Tanzania and Guinea are strategic, and help ensure that Canadian mining investment is supported and protected in these important emerging markets where great opportunities for responsible mining growth exist."
Africa is a significant destination for mining capturing 16 per cent of global exploration investment in 2012, according to SNL Metals Economics Group. In the same year, the TSX and TSX-Venture exchanges accounted for $1.7 billion in equity capital raised for African mining projects in 28 countries on the continent.
"FIPAs between the Canadian government and host jurisdictions are an important part of managing political risk and assuring investors that there are dispute resolution mechanisms available if needed," said Kelvin Dushnisky, MAC board director and Chairman of African Barrick Gold plc. "The government's efforts to prioritize FIPAs as part of Canada's trade promotion strategy will encourage investment and help to create stronger trading relationships."
According to Natural Resources Canada, there were 16 Canadian mining companies active in Tanzania in 2011 with cumulative mining assets amounting to $2.3 billion. According to the Department of Foreign Affairs, Trade and Development, in 2012, Canadian mining assets in Guinea were valued at more than $83.9 million.
Gratton notes that Canada's mining industry is responsible for nine per cent of Canadian Direct Investment Abroad (CDIA). Mining CDIA contributes directly to job creation, Canada's mining services sector - one of the largest in the world - and to Canada's global leadership in mining. Mining investment also benefits host countries. According to a 2013 World Gold Council report, high levels of companies' international investments remain in recipient countries. The report surveyed almost 100 gold mines around the world and found that out of $55.6 billion in total expenditures at least $44.7 billion (or 80%) was paid out in the country where the operation was situated.
Foreign investment protection mechanisms under FIPAs, including access to international arbitration, are relevant in the event of investment disputes. They also provide companies that are making long-term investments with an added layer of confidence. For these and other benefits accompanying freer trade, MAC encourages the federal government to continue with its active trade agenda, through negotiating and, where possible, finalizing other FIPAs, free trade agreements, and double taxation agreements.
The Mining Association of Canada is the national organization for the Canadian mining industry. Its members account for most of Canada's production of base and precious metals, uranium, diamonds, metallurgical coal, mined oil sands and industrial minerals and are actively engaged in mineral exploration, mining, smelting, refining and semi-fabrication. Please visit www.mining.ca.
SOURCE Mining Association of Canada (MAC)