Ecuador expects $1 billion in mining revenues for 2018

Fruta del Norte gold-silver project. Photo by Ecuador’s Mining Ministry.

Ecuador’s Ministry of Mining updated its 2018 outlook related to mining revenues.

A media statement on the ministry’s website states that non-oil extractive industries are expected to bring over $1 billion into the country’s coffers in 2018, mainly through the exploration and development of mining projects. Construction, on the other hand, would create another $1 billion in revenues.

These numbers are an update from previous estimates released by the Lenin Moreno government. Back in September, the expectation for 2018 was of $488 million in revenues from industrial mining.

In detail, Mining Minister Javier Córdova said that the more positive outlook is based on the income that 300 recently-approved mining titles should generate. Córdova highlighted that his office has authorized major projects and investment plans by BHP Billiton (ASX:BHP), Newcrest Mining (ASX:NCM), Hancock Prospecting, among others.

Back in October, Newcrest entered into a financing agreement with SoldGold (LON:SOLG) to help it develop its giant Cascabel copper project, near the border with Colombia. BHP, on the other hand, is keen on a few projects, including one that would imply to partner up with the country- owned miner Enami and Chile’s Codelco in their joint Llurimagua copper and molybdenum project.

Ecuador Mining Minister Javier Córdova. Photo by Mining Ministry.

Córdova also said that he is very optimistic about the cash flow that should come out of the Fruta del Norte gold-silver project, located in the southeastern province of Zamora Chinchipe. Lundin Gold (TSE:LUG) is leading the development of the high-grade property, whose Probable Mineral Reserves are of 4.8 million ounces of gold and 6.34 million ounces of silver, making it Ecuador’s largest gold project. The Canadian company is expected to pay $20 million in 2018 in anticipated royalties.

Similarly, Ecuador is expecting $30 million in anticipated royalties from the Mirador copper project, also located at Zamora Chinchipe and developed with an initial $1.4 billion investment by Chinese-owned EcuaCorriente. Production at the site should start by late 2018 and, according to Reuters, EcuaCorriente will probably pay the state about 52 per cent of its revenue.

And not only big players are hitting the area. Vancouver-based gold junior Lumina Gold (CVE:LUM), for example, recently closed a $20-million deal to help fund its Cangrejos gold-copper project located in the southern province of El Oro. Contained gold at the site is estimated at 8.8 million ounces at a grade of 0.65 grams per tonne.

In recent years, Ecuador has been making efforts to attract foreign investments such as modifying laws, fostering public-private partnerships, and highlighting the comparative benefits of choosing the country over other places in the region to develop mining projects. However, as previously reported by, social-political conditions are not ideal. Currently, Ecuador ranks 114th out of 189 countries in the World Bank’s annual “Doing Business” index, while Transparency International ranks it 110 out of 175 countries in its Corruption Perceptions Index.