Economic & Industrial

Ecuador mining sector needs clear regulations to attract investment

Ecuador mining sector needs clear regulations to attract investment
Mining News Pro - Ecuador needs clear nationwide industry regulations in order to attract foreign investment to its mining sector, the head of the country's industry association said, as community-led local referendums have slowed the development of mineral deposits.

Citizen-led ballot measures by environmental activists and indigenous communities have presented a growing challenge to a sector that President Guillermo Lasso wants to expand as part of efforts to spur a sluggish economy.

Industry concern increased after citizens in the city of Cuenca in February voted to ban future mining activities near rivers. A recent court ruling left the door open for Quito, the capital, to hold a similar ballot initiative.

"The country needs to provide a secure, clear legal framework to continue attracting foreign direct investment," Nathan Monash, head of the industry association, the Mining Chamber of Ecuador, said in an interview on Wednesday night.

"We believe that these local consultations cannot decide on issues that are of national interest and that fall within the competence of the central government."

Ecuador has abundant mineral reserves, but has lagged behind other Andean countries such as Peru and Chile in developing large-scale mining.

Organizers of the referendums say mining projects are a threat to watersheds, do not respect the rights of indigenous peoples and do not deliver sufficient benefits to the local communities.

Former President Lenin Moreno had hoped that five mining projects originally budgeted at some $7-billion would help drive the sector forward. But two, including the San Carlos Panantza cooper mine, are completely halted, and a third is relocating some facilities due to local opposition.

Lasso, a former banker, has said he will respect the concessions already granted to private companies and will ensure they follow environmental regulations.

"It is important to have a common vision of how the mining sector is going to develop," Monash said. "We are talking about a mining policy aligned with the president and his entire Cabinet."

Other mining projects are in advanced exploration, including the Cascabel project, concessioned to Australia's SolGold. In addition, the Loma Larga gold project of Canada's INV Metals could enter into production while Lasso is in office.

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