King Midas Abroad
Past President of the Canadian International Council (CIC).
“We’re changing the way we operate in this sector,” Mauricio Cárdenas, Colombia’s Minister of Mines and Energy, told The Globe and Mail this week. Cárdenas is in Toronto for the annual Prospectors and Developers Association of Canada (PDAC) convention, the world’s largest mining conference, with roughly 30,000 attendees from 120 countries this year. “A lot of the companies operating in Colombian mining are listed here,” said Cárdenas. “We have to talk to them.”
Over 30 of those TSX-listed companies operating in Colombia are Canadian, and they, along with Canadian investors, largely welcome the more modern and reliable system for the registry of land and mineral rights heralded by Cárdenas. The changes are consistent with Colombia’s rebranding as a relatively secure state intolerant of corruption. By signing a free-trade agreement with Colombia, Canada acknowledged that rebranding while also acknowledging the deep trade and investment linkages already existent between the two countries. The vast majority of these linkages are in the oil and gas and mining sectors.
The strength, impact, and symbolism of Canada’s mining industry comprise an increasingly potent foreign-policy force. In fact, many of Canada’s FTAs are signed with countries in which Canada has a strong pre-existing mining presence. Aside from Colombia, Canada also recently signed FTAs with Peru, Honduras, and Panama. The agreements with Peru and Panama were preceded by Foreign Investment Promotion and Protection agreements, of which there are many between Canada and countries that host its mining activities, including Argentina, Armenia, Barbados, Madagascar, the Congo, and South Africa.
The link between Canada’s mining industry and its foreign policy was made explicit earlier this year, when the Canadian International Aid Agency (CIDA) proposed a development initiative in South America and Africa that would involve private sector partners from the Canadian mining industry. International Co-operation Minister Bev Oda then stoked controversy when she said of the distinction between Canada’s trade and foreign policy interests and its development goals, “I really don’t separate them.”
Suspicion of public and private sector motivations aside, it is unsurprising that the Canadian government takes the mining industry into account when it comes to foreign policy. The Canadian mining sector invests over $100 billion in assets in over 90 countries annually. Meanwhile, more than 80 per cent of global mining financing transactions and a third of global mining capital flow through the Toronto Stock Exchange. Mining exports account for less than four per cent of Canada’s GDP, but the activities of the mining industry’s global financial hub, the TSX, keep the Canadian mining industry on the map.
Events like the PDAC conference show Canada’s eagerness to match this global strength with global responsibility. The PDAC conference is not just a trade show like the Indaba conference hosted in Durban last month but an international educational event hosted by Canadians. PDAC holds dozens of sessions and workshops led or co-led by Canadians that provide technical training in a range of areas. Among these areas are best practices in exploration, land management, aboriginal relations, investment fundamentals, regulation, strategic communication and company management. PDAC also devotes a six-part event series to corporate social responsibility. Such events are crucial to Canada’s reputation as host not only of the industry’s financing but also of its best practices, cutting-edge technologies and reputable corporate cultures.
Industry activities do not a foreign policy make. But Canada’s mining legacy, from the Yukon Gold Rush to the rise of the Global Mining Index, is internationally recognized and respected. With responsible decisions from both the private and public sectors, it should remain that way.
Photo courtesy of Reuters