Ecuador’s new mining policy backs large-scale projects

The new mining policy was presented in the Zamora Chinchipe province, where Lundin Gold’s Fruta del Norte gold project -pictured here- is located. Photo by Lundin Gold.

The Vice President of Ecuador, Otto Sonnenholzner, and the Minister of Energy and Non-renewable Natural Resources, Carlos Pérez, presented the country’s new Public Mining Policy, with the focus on supporting large-scale operations and investments, and eradicating illegal mining.

The announcement was made during a visit to the southern Zamora Chinchipe province, where Lundin Gold’s (TSX:LUG) flagship Fruta del Norte gold project is located. Both Sonnenholzner and Pérez visited the mine site and met with representatives of the Canadian company, who said 50% of the construction phase is completed.

Minister Carlos Pérez presenting the new mining policy. Photo by the Ministry of Energy and Non-renewable Natural Resources.

The government officials said they expect first exports from large-scale mining to be delivered before year-end and that the national treasury foresees royalties, taxes, patents, and earnings generating some $836 million between 2019 and 2021. By 2021, the Lenín Moreno administration wants the mining sector to account for 4% of the GDP.

Besides focusing on large investments, the new policy gives relevant authorities six months to update a national mining development plan so that it incorporates a strategy to combat unregulated mining operations and severe penalties for those extracting mineral resources illegally.

The policy also requires authorized mining projects to comply with mining safety and environmental and social sustainability standards, which will be outlined in new regulatory and auditing mechanisms.

The new protocol calls for the establishment of specific targets related to the updating of applicable regulations for the mining industry, as well as goals associated to economic development, research and development, and management and administration.

The presentation of these guidelines took place on the same week the Ecuadorian Constitutional Court is scheduled to receive arguments from those who have put forward a mining referendum in the northern Imbabura province, where SolGold’s (LON, TSX:SOLG) flagship Cascabel copper-gold project is located.