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
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)
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