Codelco’s Ecuador project faces risky future
Chilean state-own Codelco, the world's largest copper producer, will face major challenges and protests developing the Junin copper deposit in Ecuador, which are likely to lead the mine development to fail, says Ecuadorian grassroots environmental organization Decoin.
Last week, the copper giant and Ecuador's state miner Enami EP got the green light to begin joined exploration on the Toisan mountain range, but that decision is being questioned by local authorities and community members, reports BNAmericas (subs. required).
According to a Decoin spokesperson quoted in the article, the endorsement violates legally binding land use and development plans for the area, as well as a local ordinance designating the region as a protected area.
“Furthermore, no prior consultation process was carried out, violating communities' constitutional right to be consulted on any decision that could impact their environment. That has been violated from day one," the source was quoted as saying.
Neither Codelco nor Enami responded to request for comments on this issue.
Ecuador’s mining chamber of commerce values the country’s metals wealth at $220 billion and says it is sitting on more than 39 million ounces of gold reserves and over 8 million metric tons of copper.
In 2008, the country withdrew over 4,000 mining concessions including Canada's Copper Mesa (formerly Ascendant Copper) rights to explore Junin.
Recently re-elected President Rafael Correa rewrote the country’s mining laws the following year to give the state greater control over the country’s mineral resources.
Since then, his administration has supported investment in the country’s mining industry.
Last year, Ecuador signed a contract with Chinese company Ecuacorriente for the investment of $1.4 billion in the first large-scale copper project in the nation. And Canada’s Kinross Gold Corp. (TSX:K), (NYSE:KGC) is to develop the Fruta del Norte project, the largest gold deposit in Ecuador.
Correa is also trying to boost the country’s oil sector. As Opec’s smallest member, the South American country’s oil production has been stuck at around 500,000 barrels of oil equivalent per day due to a drop in foreign investment to less than $1 billion a year.
But his government expects to attract investments worth around $1 billion in oil exploration for some 16 blocks in the Amazon, most of which will be offered in auction later this year.
(Protest against large-scale mining in Ecuador, July 2011, by Upside Down World)