Canadian Mining Assets

INFORMATION BULLETIN, JANUARY 2013

The Geographical Distribution of Canada's Mining Assets

Canada's International Presence in 2011

Canadian mining assets ¹ (CMA) grew by 15% in 2011 and surpassed the $200 billon mark to reach an unprecedented $215.3 billion. Canadian mining assets abroad (CMAA) reached $146.2 billion in 2011, equivalent to a 16% increase over 2010 and accounting for almost 70% of CMA.

Canadian companies were active in 106 foreign countries in 2011, compared with 102 in 2010. New additions for 2011 include Cambodia, Equatorial Guinea, French Guiana, Guinea-Bissau, and Malawi.

The countries where Canadian companies held the most value in CMAA were Mexico ($20 billion), Chile ($19 billion), and the United States ($17 billion). Figure 1 illustrates the total percentage of CMAA in the “top ten” countries, which together accounted for 66% of total CMAA.

The majority of CMAA (59%) was found in the Western Hemisphere (the Americas). Table 1 gives the amount and percentage of CMAA by region and Figure 2 provides more regional details on a map. While Canada and the rest of the Western Hemisphere showed the greatest absolute gain over 2010, Asia had the greatest percentage increase from 2010 to 2011. The value of CMAA in 2011 was more than double that of CMA in Canada ($146.2 billion vs. $69.1 billion).

Asset Changes Contributing to the 2011 Increase in the Value of CMA

Barrick Gold in Zambia and Saudi Arabia: The key driver for the increase in Africa was Barrick’s acquisition of Equinox Minerals and its Lumwana mine. Barrick also acquired the Jabal Sayid copper project in Saudi Arabia in the same transaction. An increase of over $12 billion was recorded for Barrick Gold in 2011, representing close to a 40% gain from 2010. With assets of $31 billion, Barrick was the top Canadian company based on mining assets value in 2011.

Ivanhoe Mines in Mongolia: The largest factor for the increase in Asia was the continuing development of the Oyu Tolgoi project by Ivanhoe Mines.

AuRico Gold in Canada: AuRico Gold acquired Northgate Minerals and continued development of the Young-Davidson property in northern Ontario.

Annual Variations

In comparing asset totals across years, it is important to understand the causes of variations. The most important factor in CMA annual variations, within countries and in total, is additions to, and subtractions from, the stock of hard assets. Additions arise from asset construction (exploration and mine development), mergers, and acquisitions. Subtractions arise from asset write-offs, mine closures, asset depreciation, and the sale of hard assets. The adoption of International Financial Reporting Standards (IFRS), exchange rate movements, and the relocation of company headquarters also contribute to annual variations across groupings of assets.

Use of CMAA Statistics

When the question is asked “What is the value of Canadian mining investment in Country X?”, some care is required in answering. CMAA, as tracked by Natural Resources Canada, differs from Canadian Direct Investment Abroad (CDIA) figures estimated by Statistics Canada. CDIA is based on Foreign Direct Investment (FDI) as defined internationally, based on national systems of accounts. CMAA are based on financial accounting standards used by Canadian public companies. Table 2 outlines the principal differences between these approaches.

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¹Research Note: Natural Resources Canada compiles the value of the mining assets of public Canadian companies headquartered in Canada. Mining assets, in this context, are tangible capital assets, mineral properties, deferred mineral exploration expenses, and royalties, at cost. Asset values are reported by Canadian mining companies in their audited annual financial reports.

In 2011, a total of 1713 companies were researched:

1505 were identified as having mining assets, compared to 1380 in 2010;
27 (2%) had mining assets over $1 billion;
182 (12%) had revenues (mostly producing mines);
844 (56%) had interests outside of Canada; and
572 (38%) had mining assets in at least two countries.

Efforts to achieve more complete coverage in 2011 resulted in:

adding $5.9 billion to 2011 mining assets; and
adding $3.9 billion to 2010 mining assets.

Figure 1
Percentage of Canadian Mining Assets Abroad by Country, 2011
Figure 1 Percentage of Canadian Mining Assets Abroad by Country, 2011
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Figure 2
Canadian Mining Assets 2011
Figure 2 Canadian Mining Assets 2011
[text version]
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Source: Minerals and Metals Sector, Natural Resources Canada.
(M) Millions; (B) Billions.
Notes: All amounts are in Canadian dollars. Company counts are for the 2011 reference year and do not add to totals since companies can be active in multiple jurisdictions. Figures for 2010 have been revised.

Table 1. Canadian Mining Assets by Region, 2010 and 2011

Region	2011 ($ billions)	2010 (r) ($ billions)	Change (%)
Africa Americas (excluding Canada) Asia Europe Oceania	31.6 86.8 15.0 7.4 5.4	26.9 77.2 10.8 6.7 4.7	17 12 38 11 14
Canadian mining assets abroad	146.2	126.3	16
Canada	69.1	60.8	14
Total	215.3	187.1	15

(r) Revised.

Table 2. CDIA and CMAA Compared

CDIA	CMAA
• Financing must come from Canadian sources	• Source of financing is immaterial
• Examines assets and liabilities in the financing	• Considers asset values only
• Based on first destination (Canadian investment destined for Mexico through a U.S. subsidiary is counted as FDI in the United States)	• Based on final destination (the same transaction in the left column would be considered CMAA in Mexico)
• Definition of Canadian company for FDI purposes: minimum 10% control of investee, using Canadian financing	• Canadian company: has a brick-and-mortar “working” headquarters in Canada
• Statistics Canada does not provide sector-by-country data for mining	• CMAA can be found by sector and country together