Capitalizing on Canadian Leadership in a Global Market (Potential Area of Focus)

A strong Canadian mining industry is about successful, sustainable mining and associated activities taking place on Canadian soil. It is also about the global competitiveness and leadership of Canadian companies operating abroad.

Canadian mining has a socio-economic impact around the world. In 2015, publicly traded, Canadian-based companies had total mining and exploration assets of $171 billion spread across more than 100 foreign countries. Top destinations for Canadian mining assets are the United States (15%), Mexico (11%), and Chile (11%).

The Mining Association of Canada reports that its member companies spent US$10.7 billion in host countries, and employed more than 53,000 people at international operations.Footnote 1

Canada’s international trade agreements expand opportunities for the Canadian industry, and Canada works with partner governments to build capacity in mineral resource governance and to promote the conditions that support Canadian investors.
Canada is a global leader in the provision of mining services and the development of innovative technologies for the industry. More than 3,000 companies provide technical, legal, financial, accounting, environmental, and other expertise, and many of these companies have a global presence.

Canada’s Brand is important for attracting foreign direct investment (FDI) for mining at home, where it creates employment and business opportunities. As noted, mineral exploration and mine construction and operation are long-term, high cost activities requiring significant capital. FDI can help realize new mining projects, support infrastructure development, and drive innovation.


Canadian mining assets are located around the world
Percentage of CMAA by country, 2015

Text Version

Canada’s mining assets are located around the world and are distributed as follows: 15% in the United States, 11% in Mexico, 11% in Chile, 8% in Argentina, 6% in Peru, 5% in Brazil, 5% in Zambia, 4% in Dominican Republic, 4% in Panama, 3% in the Democratic Republic of Congo, 3% in China, 2% in Madagascar, 2% in Australia, 2% in Greece, 2% in Finland and 28% in other countries that not listed on the map.


Challenges

Canada has seen an upward trend in FDI; however, mining is a global, cyclical industry where capital is mobile. Competition among countries for investment dollars is fierce, and our competitors are continually looking for ways to attract more investment.


FDI in Canada grew from $9.5 billion in 2008 to $35.5 billion (projected) in 2016

Text Version

The stock of foreign direct investment in the minerals sector is projected to increase from $9.5 billion in 2008 to $35.5 billion in 2016.

Canadian companies operating abroad are subject to the laws and regulations of host countries, which can be difficult to navigate in certain regions. Other issues such as security and public confidence can act as barriers to entry and operation for Canadian investors. Companies must also strike a balance in their commitments to both local communities and shareholders.

In terms of the destination for Canadian minerals and metals, Canada has taken advantage of opportunities to diversify the markets it serves, but the United States remains the largest buyer and accounts for 55% of Canada’s merchandise exports. Greater market diversity for Canada’s minerals and metals industry would mitigate risks associated with competitive pressures, fluctuating commodity prices, exchange rate volatility and other economic factors.

Other countries pursuing mineral development projects may not have Canada’s regulatory rigour, requirements for consultations, or expectations for how mining companies should operate. As such, it may be easier for companies to establish operations in other countries that do not share Canada’s commitment to high standards.

As global demand for innovative, low-carbon technologies for the mining sector grows, Canada’s service and technology providers will need to compete in an increasingly dynamic global marketplace.

Discussion questions

  • What can we do to better support the success of Canadian companies abroad?
  • How can we attract more foreign direct investment into Canada’s minerals and metals industry?

Footnotes