Canada--Africa: Defrosting a frigid relation?
The first ever Canada-Africa Business Summit took place from 15th-18th September in Toronto. Over 1,000 people are reported to have participated in the event, which attracted leading Canadian and African businesses, NGOs and government actors. The focus was on a wide range of sectors from mining, infrastructure and ICT to education, and the question that dominated the conference was how to further improve Canadian-African business relations.
On the face of it, Canada has a number of advantages over other foreign states pursuing stronger relations with African countries. Canada has both English and French as its official languages, and both are widely spoken in Africa. Canada uses both the French civil code and the English common law system, which form the basis of legislation in many African countries Also Canada is the only G8 country not to have ever possessed any overseas colonies--which means it does not have the same imperial stigma as countries such as the UK and France. Canada has a lot in common with many African states too, such as its sparse populations existing in vast areas of land and extensive natural resources. Canada is also a massive investor and operator in the African mining space.
However, the North American country appears to have adopted a frigid attitude to Africa--with very few diplomatic missions, the slashing of aid budgets and what is often interpreted as a hostile attitude towards Africans in general.
During the summit, Christian Paradis, Canada's Minister of International Development, announced that Canada is committing over $300m to invest in African SMEs and pumping $12.5m into Ethiopia's mining industry. One of the highlights of the whole event was the signing of a Memorandum of Understanding between Ethiopian Mineral Development Share Company (EMDSC) and Canadian mining and metal refining firm CVMR. The agreement is estimated to be worth around $3bn.
Both sides hope that the memorandum will pave the way for cooperation in the production of iron, nickel, lithium, PGM, tantalum, and niobium ore, and the refining of these concentrates into nano-powders. Through the agreement, CVMR has first rights to concentrates for a 25-year period.
Dr Kamran Khozan, Chairman of CVMR said, "The demand for premium-priced speciality metal powders is growing at a rate of 26% per year. CVMR's patented production methods produce metal powders up to 99.999% purity and at higher recovery rates and more economically than other mineral extraction methods. CVMR is very pleased that its technology can help unlock much wealth and generate economic development for the rapidly growing country of Ethiopia."
Ethiopia's Minister of Mines, Tolessa Shagi, replied that "The CVMR refining technology's ability to simultaneously refine multiple metals is very valuable to our mine sites and has the potential to transform Ethiopian mining economics and attract investment."
Over the years, Canada has signed Foreign Investment Promotion and Protection Agreement (FIPA) with several African countries although the bulk of these agreements in SSA were made over the last three years. Partners include: Benin, Egypt, Nigeria, Cameroon, Burkina Faso, Guinea, Cote d'Ivoire, Senegal, Mali and Madagascar. There are ongoing FIPA negotiations with Ghana and Kenya.
Mining is king
Mining is where Canada dominates when it comes to economic relations with Africa. Canadian mining firm Sherritt, for example, co-owns the world's biggest finished nickel and cobalt project from lateritic ore with Sumitomo, Korea Resources and SNC-Lavalin. The mine, Ambatovy, is located 80 kilometres east of Madagascar's capital. In January, Sherritt announced that Ambatovy had reached commercial production. It adds that Ambatovy is "one of the most ambitious industrial undertakings in the history of Madagascar, Africa, and the Indian Ocean".
Ivanhoe Mining is heavily involved in South Africa: the firm is currently developing a huge platinum mine several hundred kilometres south of Johannesburg. In June, South Africa's mineral resources department gave the green light for Ivanhoe to develop platinum, nickel, gold and copper at its project, located in the country's Limpopo Province: "The awarding of this mining right is hugely significant not only for Ivanhoe Mines but for South Africa's mining industry as a whole and is a culmination of Ivanhoe's exploration on the Bushveld."
Canadian multinational mining firm Barrick Gold Corporation has, of course, extensive operations in Tanzania through its subsidiary, African Barrick Gold. The firm is the largest gold producer in Tanzania and one of the biggest on the continent.
The Bulyanhulu complex produced 198,286 ounces in 2013. Reserves life is 25+ years and its proven and probable reserves by the end of 2013 came to 9.4m oz.
African Barrick Gold also owns Tanzania's deepest mine, Buzwagi. Production at Buzwagi, which is expected to have a mine life of five years, came to 181,984 ounces last year. Its proven and probable reserves were 1.1m oz by the end of 2013. It is Tanzania's second biggest mining operation and the biggest single open pit mine in the country.
African Barrick Gold also owns North Mara--an open pit mine in the Mara region of Tanzania. North Mara's produced 256,732 ounces in 2013, and the open pit mine is estimated to have a life of 10 years. Its proven and probable reserves were 2.2m oz by the end of last year. The company is listed on both the London and the Dar es Salaam Stock Exchange.
Massive Canadian presence
Another Canadian mining firm operating in Africa is Allana Potash Corp, which has four potash concessions in northeastern Ethiopia, at the Danakil Depression. Allanas Danakhil Potash Project spans around 312 square kilometre. There are many other examples of big Canadian mining firms operating in Africa. Endeavour Mining Corp operates the Agbaou gold mine in Cote d'Ivoire, the Tabakoto gold mine in Mali, the Nzema gold mine in Mali and the Youga gold mine in Burkina Faso.
First Quantum Minerals has operated the Kansanshi mine in Zambia and the Guelb Moghrein mine in Mauritania. It also has three further development projects in the pipeline in Zambia, including the launch of a copper smelter. Nevsun Resources, Platinum Group Metals and Volta Resources are all other big mining companies operating in Africa. Joining them are hundreds of junior mining firms, headquartered in either Vancouver or Toronto.
Canada is only second to South Africa in terms of its total mining assets and investments in Africa, accounting for more than 35% of total assets and investments in the region, according to Natural Resources Canada. Moreover, most of South Africa's mining activities are concentrated in its own country, meaning that Canada is the overall leader in terms of assets and investments on the continent excluding South Africa.
According to Natural Resources Canada, 155 Canadian mining companies were active in 39 African countries in 2011, compared to presence in 24 African countries in 2001 and 35 in 2007. Its key mining partners, in order of importance are: Zambia, Mauritania, South Africa, Madagascar, DRC, Ghana, Tanzania, Mali, Senegal, and Eritrea. Combined assets came to over $30.8bn in 2011, compared with $26.5bn the year before.
Canadian firms have a particularly strong presence in East Africa--with $i2.7bn worth of commitments in 2011. The North American country had $9-9bn worth of investments in the same year in southern Africa, Central Africa and $36.701 in North America.
Canada's relationship with Africa in terms of aid and development has been more mixed. Canada made cutbacks to its aid to the continent in the 1990s due to tightened government budgets. Under the government of Prime Minister Paul Martin from 2003 to 2006, however, aid to the continent grew, making Cananda the third-most-important foreign donor to Africa. Under the current Prime Minister Stephen Harper, who took office in 2006, however, Canada's development activity in Africa has dramatically declined, especially following Canada's decision to suspend all of its aid to Africa in 2010.
Some observers have also criticised Canada's lack of appetite for strengthening its diplomatic relations with African countries and its poor involvement in peacekeeping activities in the region. Canada has contributed little to UN peacekeeping operations in Africa's key conflict zones. In October last year, Canada also dismantled its Sudan Task Force, which had been coordinating Canada's peacekeeping efforts in the country.
Moreover, Canada has barely more than a dozen diplomatic missions in Africa's 54 countries.
Even in South Africa, where Canada has heavy involvement in the mining industry, Canada's lack of diplomatic efforts--for example, failing to send diplomats to the ANC's 100th anniversary celebrations--the now-deceased Nelson Mandela's party has been drawing fire.
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|Date:||Nov 1, 2014|
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