Canada is a leader in the global mining industry with its extensive natural resources and long history of mineral development. Over 1,530 mining companies listed on the Toronto Stock Exchange and Venture Exchange (collectively TSX) hold more than 9,700 exploration projects, 50% of which are located outside of Canada.
Canada’s stable and sophisticated financial, business, governmental and legal environment, as well as its policy of welcoming foreign investment, supports the vibrancy of the mining industry domestically and abroad. The Canadian mining industry is recognized for its technical expertise, which has resulted in the development of increasingly efficient methods of exploiting known deposits and discovering new ones. Consequently, there are many companies that can be good partners or offer valuable investment opportunities. It is only logical that, as the global hunger to secure reliable access to these resources intensifies, Canada will increasingly serve as a global “buffet” for mining investors.
Review of foreign investment
Foreign investment in Canadian businesses may trigger Investment Canada Act (ICA) review, which requires a finding that the investment is “likely to be of net benefit to Canada”. There are specific rules in an ICA review for state-owned enterprises and for investments potentially injurious to Canada’s national security. ICA approval is generally not required for the acquisition of a minority interest in a mineral project even if the buyer is a state-owned enterprise. Where required, ICA approvals have generally been issued on manageable terms, and we do not view the recent ICA decision on BHP Billiton’s proposed acquisition of Potash Corporation as a sign that Canada’s attitude toward foreign investment is becoming more restrictive.
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Kenneth G Klassen and Eden M Oliver are partners at Bennett Jones LLP and can be contacted at email@example.com and firstname.lastname@example.org. Bennett Jones has particular expertise in the energy and natural resources sector, especially oil and gas. It has more than 400 lawyers and advisers in major cities across Canada as well as in Dubai.
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