Ecuador moving from explorers’ hotspot to copper exporter with first cargo

The $1.4 billion Mirador open-pit mine, owned by a joint venture of Tongling Nonferrous Metals Group and China Railway Construction (EcuaCorriente), opened in July. Operations, however, slowed down earlier this month as a precautionary measure to protect workers following massive protests against an end to fuel subsidies, since then scrapped.

The Chinese consortium gained access to Mirador through the acquisition of EcuaCorriente during the government of former President Rafael Correa.

The asset, in the southeastern Zamora-Chinchipe province, has an estimated 3.2 million tonnes of copper reserves, along with 3.4 million ounces of gold and 27.1 million ounces of silver.

According to government’s figures Mirador has already stockpiled 30,000 tonnes of copper, which it plans to export on Nov. 14.

“Initially we planned to have it done by the end of this month,” Ecuador’s vice minister of mines, Fernando Benalcazar, told Reuters on the sidelines of a mining conference in Australia. “It will be the first time we have a larger scale exportation going out,” he noted.

Canada’s Lundin Gold (TSX:LUG), which has been developing its Fruta del Norte gold project for almost two years, is set to follow suit.

The Vancouver-based miner, acquired the project in 2015 for $240 million from fellow Canadian miner Kinross Gold (TSX:K) (NYSE:KGC), is expected to declare commercial production in two weeks’ time.

Other major mining projects in Ecuador include the Cascabel copper-gold project, operated by Australia’s SolGold (LON, TSX:SOLG); and the Llurimagua copper mine, to be run by Ecuador’s Enami and Chile’s Codelco, the world’s No. 1 copper producer.

Ecuador has gained ground as a mining investment destination in the past two years thanks to a revised regulatory framework and a major investor engagement campaign. Existing and future projects, however, risk delays and potential halts due to growing local opposition to the extraction of the country’s resources, a report by Fitch Solutions Macro Research shows.

As mining projects face headwinds from rising tensions, investors’ courage will be tested, the study concluded, which could thwart Ecuador’s plan to attract $3.7 billion in mining investments over the next two years, significantly up from the $270 million it received in 2018.