TORONTO (miningweekly.com) – The Mining Association of Canada (MAC) on Monday commended 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 in the day, and the negotiations with Guinea were concluded last Thursday.

"Given the global nature of our sector, the Canadian mining industry is highly supportive of the formation of new investment agreements. 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 growth exist," MAC president and CEO Pierre Gratton said in a statement.

Africa is a significant destination for mining, capturing 16% of global exploration investment in 2012, according to SNL Metals Economics Group. In the same year, the TSX and TSX-V 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. The government's efforts to prioritise FIPAs as part of Canada's trade promotion strategy will encourage investment and help to create stronger trading relationships," MAC board director and African Barrick Gold chairperson Kelvin Dushnisky added.

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 noted that Canada's mining industry was responsible for 9% of Canadian direct investment abroad (CDIA).

Mining CDIA contributed directly to job creation, Canada's mining services sector – one of the largest in the world – and to Canada's global leadership in mining.

The MAC also underlined the fact that mining investment also benefitted host countries. According to a 2013 World Gold Council report, high levels of companies' international investments remained 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, were relevant in the event of investment disputes. They provided companies that were making long-term investments with an added layer of confidence.

For these and other benefits accompanying freer trade, MAC encouraged the federal government to continue with its active trade agenda, through negotiating and, where possible, finalising other FIPAs, free trade agreements, and double taxation agreements, the MAC said.