Canada's International Presence in 2009

The Canadian mining sector is one of the few industries in which Canada has a strong external investment presence. A key factor in this result is the pre-eminent position of Toronto as the world’s leading mining financial centre, giving Canadian firms the ability to quickly finance projects.

Almost half (46.2%) of Canada’s mining assets abroad (CMAA) are located in three countries:

  • Mexico (185 Canadian companies represented with $18.3 billion);
  • Chile (48 companies with $16.5 billion); and
  • the United States (263 companies with $15.5 billion).

Figure 1: Canadian Mining Assets Abroad, by Country, 2009
Figure 1: Canadian Mining Assets Abroad, by Country, 2009

The other leading investment countries1 are revealed in Figure 1. In total, Canadian mining companies own assets abroad valued at over $109 billion in over 90 countries, down slightly from $111 billion in 2008. In 21 countries abroad, Canadian mining assets exceed $1 billion each; 10 of these are in the Western Hemisphere and 5 more are in Africa.

Figure 2 illustrates CMAA by world region; it reveals that the Western Hemisphere (the United States, Latin America, and the Caribbean) contains almost two-thirds (65.6%) of CMAA.

Each of the “Big Three” countries could be considered a region by itself. It may be seen from both figures together that each of the “Big Three” has more Canadian mining assets than Europe and Asia combined.


Natural Resources Canada compiles the value of mining assets abroad 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. 

According to Canadian accounting standards, mining companies can choose to capitalize exploration costs or expense them.2 The vast majority of companies choose to capitalize these costs, thereby achieving a positive financial situation that is more attractive to potential investors. Capitalization of exploration costs clearly identifies for the investor the properties on which each dollar has been spent. However, if and when no economic deposits have been discovered, these assets are then written off.

Figure 2:  Percent of Canadian Mining Assets by Region, 2009

Figure 2: Percent of Canadian Mining Assets by Region, 2009

Highlights of 2009

Canadian mining investments were not immune to the recession of 2008-09. Assets in the “Big Three” countries declined slightly from 2008 to 2009.3 The recent crisis was as much financial as economic; it originated in the financial markets, where exploration companies must finance projects through equity. But considering the intensity with which the recession affected the domestic industry (plant shut-downs, postponed investments, layoffs), the slight reduction in total assets abroad indicates that Canadian miners demonstrated a resolve to maintain their foreign investments.

Annual Variations

The most important factor in the annual variations for CMAA, within countries and in total, is of course additions to, and subtractions from, the stock of hard assets. Additions arise from asset construction (exploration and mine development), asset appreciation, and acquisitions of other firms’ assets. Subtractions arise from mineral property write-offs, mine closures, asset depreciation, and sales of hard assets. In addition to these factors, the following also affect annual variations:

  • Exchange rates: Most Canadian companies value their assets in Canadian dollars. Some, however, do so in U.S. dollars. In 2008, the exchange rate used was US$1.00 = C$1.21; in 2009 it was US$1.00 = C$1.04. So a US$1 000 000 asset in 2008 would be recorded in CMAA as C$1 210 000; if there was no other change to that asset, it would be recorded in 2009 as C$1 040 000, a decrease of C$170 000.
  • Change of headquarters: CMAA are based on the annual financial reports of public companies headquartered in Canada. When there is sufficient evidence that executive decisions are now taken outside the country, that company’s assets are no longer recorded in the CMAA tally. In 2009, CMAA recognized, among others, the relocation of the executive headquarters of Katanga Mining and European Goldfields to London (United Kingdom) and of Polymet Mining Corp. to Minnesota (United States). These three changes alone account for the loss of $2.36 billion to CMAA, which is more than the difference of $1.94 billion between the 2008 and 2009 totals.

These two factors together – exchange rate differentials and change of company headquarters – more than account for the aggregate CMAA difference between 2008 and 2009.

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 estimates, as calculated by Natural Resources Canada, differ from the 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 1 outlines the main differences between the two methods:

Table 1
  • Financing must come from Canadian sources
  • Examines assets and liabilities in the financing
  • Data are based on first destination (e.g., Canadian investment destined for Mexico that goes through a U.S. subsidiary is counted as FDI in the United States)
  • Definition of Canadian company for FDI purposes: minimum 10% control of investee, using Canadian financing
  • Statistics Canada does not provide sector-by-country data for mining
  • Source of financing is immaterial
  • Considers asset values only
  • Based on final destination  (the same transaction in the left column would be counted as CMAA in Mexico)
  • Canadian company: has a bricks-and-mortar “working” headquarters in Canada
  • CMAA can be found by sector and country together

The differences between the two methods can be large: in 2008, for the four main mining sub-sectors4 in total, CDIA yielded $66.2 billion; CMAA generated $111 billion.5 For the purposes of international comparison, it is best to use CDIA. For the purposes of illustrating Canada’s international mining presence, CMAA estimates are readily understood by industry, government agencies, and elected public officials.


In spite of a difficult world economy through much of 2008 and 2009, CMAA changed very little. Canadian mining firms are keen to build upon their existing base of hard foreign assets.  It is already clear that, in 2010, large increases from 2009 will be seen in most regions.


1 Countries each with Canadian mining assets exceeding $3 billion.
2 Under the International Financial Reporting Standards to be applied in 2011 and onwards, companies may choose whether they wish to expense or capitalize exploration costs. They must then maintain the method chosen.
3 Possible reasons for annual variations are outlined in a following section of this bulletin.
4 Mining, primary metal manufacturing, nonmetallic product manufacturing, and metal fabricating.
5 CDIA includes semi-fabricated and fabricated metal products, whereas CMAA include only mining, smelting and refining operations. However, Canadian metal fabrication operations abroad are only a small fraction of mining assets abroad.

© Her Majesty the Queen in Right of Canada, 2011