Mining companies express worry over Ecuador court ruling

Credit: Cornerstone Capital

Ecuador’s mining industry is threatened by legal uncertainty, the sector’s guild said on Wednesday, citing a decision by the country’s top court to withdraw environmental permissions for a project in a protected forest.

The Constitutional Court last week rescinded an environmental license for initial exploration at the Rio Magdalena project in the Los Cedros forest in the country’s north.

The court said the project, being developed by state-owned mining company Empresa Nacional Minera and Canadian partner Cornerstone, violated the rights of nearby communities to a prior consultation and of the forest to protection.

The Ecuador Mining Chamber, however, said the court had overreached its remit.

“In this decision the court ignored the rights given by the state to the licensee,” the guild said in a statement. “This industry is now seriously threatened by judicial insecurity from this ruling.”

There are two major gold and copper mines operating in Ecuador’s Amazon region, while other projects have been halted by community opposition.

Ecuadorean President Guillermo Lasso, a conservative ex-banker, has pledged to give more security to the mining sector in a bid to attract investment, while allowing community consultation rights.

The government expects mining exports worth $1.6 billion this year.

Los Cedros forest counts about 290 species of trees per hectare, thousands of insects and dozens of mammal species like the capuchin monkey, the black-headed spider monkey and the howler monkey, many of whom are in danger of extinction.

“The ruling creates a great precedent for the whole country for the protection of forests,” Jose Cueva, spokesman for the Mining, Environmental and Social Observatory of Northern Ecuador advocacy group, told local media.

“The problem in Ecuador is the mining industry is modifying laws in their favor.”

(By Alexandra Valencia and Julia Symmes Cobb; Editing by Jane Wardell)

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