Ecuador signs $1.7 billion mining deal with China’s CMOC Group

Ecuador signed a mining contract with the local subsidiary of China’s CMOC Group for the Los Cangrejos mining project, Ecuador’s energy ministry said on Monday, putting the total expected investment at more than $1.7 billion.

The project, located in the El Oro province and developed by subsidiary ODIN Mining del Ecuador, is projected to generate $4.39 billion in total revenue for the state through taxes, royalties, and other fees, the ministry said in a statement.

The agreement ensures the state retains a 50% share of the project’s value, the ministry said.

Ecuador will receive $54 million in advance royalties, with $34 million paid upon signing. The remaining payments are tied to construction milestones, including the start of the processing plant and the beginning of mining operations.

Development of Ecuador’s mining sector has frequently been slowed by community opposition, litigation and regulatory changes. The Fruta del Norte gold mine and the Mirador copper mine, both of which began production in 2019, remain the country’s only two large-scale mining operations currently in operation.

(Reporting by Alexandra Valencia; Editing by Brendan O’Boyle and Daina Beth Solomon)