Ecuador’s newly appointed Vice Minister of Mines, Fernando L. Benalcazar, had told delegates at the International Mining and Resources Conference (IMARC) in Melbourne that his country has put plans in motion to aggressively grow mining from 1.55 per cent of GDP to 4 per cent of GDP by 2021.
Speaking to a room filled with investors keen to hear about opportunities in Latin America, the Vice Minister outlined how the Ecuadorian Government has created a new Super Ministry for Energy and Non-renewable Resources. The Minister will hold responsibility for the strategic development of the sector.
“Ecuador will shortly release a formal Government policy to make the mining industry a long-term key economic driver.
“Over the past two years the mining industry has grown from 0.8 to 1.55 per cent of GDP, and now the goal is to grow that to 4 per cent GDP by 2021,” said the Vice Minister.
To facilitate this growth, the Vice Minister announced that there are five major, world-class projects either in, or close to, production.
The Vice Minister said that technology transfer is critical to any productivity improvements and is heartily welcomed and supported by the Ecuadorian Government.
To attract further investment, the Ecuadorian Government is offering potential partners unified royalty rates for medium and large-scale mining at a range of 3 to 8 per cent.
“This rate will be applied via a standardised formula, generating fair and equitable market conditions with no need to negotiate.
“The country has also eliminated windfall tax, which was well received by potential investors,” said the Vice Minister.
While the country has a 750 km stretch of relatively untouched, highly prospective endowment of copper, silver, gold, zinc and more, the Vice Minister says that the Super Ministry will only approve potential partners with world-class sustainability practices.
“If you do not manage community and environmental issues in balance with economic progress and investment, your project will be compromised.
“Everyone has the right to be listened to, and everyone has the right to give an opinion,” said the Vice Minister.
According to Austrade the total Australian investment in Ecuador to date is estimated at US$440 million.
In addition to Solgold, Australian mining investors Fortescue Metals Group, BHP and Newcrest, together with firms from Canada, Chile and China, already have a presence.
Several Australian companies, including Cardno, QBE, and LATAM Autos are also established in Quito along with a handful of METS firms delivering services.