Ecuador’s mining industry offers golden opportunities
Ecuador’s ascendance as a large-scale mining country looks set to continue, with the South American republic expecting more than US$1bn in mining investments by 2021.
Ecuador opened two ‘game-changing projects” in 2019; The Mirador copper-gold project, owned by a Chinese consortium led by Tongling Nonferrous Metals Group; and Fruta del Norte, in southeastern Ecuador, operated by Canadian company Lundin Gold.
According to government officials, by 2021, the mining industry could represent up to 4% of the country’s GDP, up from 1.6% in 2018.
The first Ecuador Mining Summit is taking place in Quito on 18-19 March 2020 with a focus on major mining project opportunities, development, operation and financing. This high-level event will provide a unique platform for local and international companies, investors and financial institutions to engage with Ecuador decision-makers on short-term and long-term cooperation possibilities.
Mirador has a mine life of 27 years with committed investment of US$2bn including US$367mn by 2021. Annual production is put at 94,000t of copper, 58,000oz gold and 620,000oz silver.
Fruta del Norte is set to produce 310,000oz of gold and 400,000oz of silver annually. Today, the whole country produces 284,000oz of gold. The surrounding communities have endorsed the jobs and educational programs offered by the Canadian mine operator. Lundin Gold will invest US$670mn in the project by 2021, while the amount committed for the next 15 years is US$2.7bn.
Ecuador’s deputy mining minister Fernando Benalcázar said: “Last year we didn’t have large-scale mining and we achieved US$742mn in investment in mining. Now we have large-scale mining projects and within the next two years we will reach US$1.1bn in committed investment with a potential US$783mn in exploration programs.”
Another three projects are due to be in production from 2024: Lumina Gold’s Cangrejos project (gold/copper); Llurimagua (copper-molybdenum), a joint venture between Ecuador’s national mining company ENAMI EP (51%) and Chilean state copper company Codelco (49%); and Australian SolGold’s Cascabel porphyry copper-gold project. The latter hosts three times Mirador’s reserves and five times Fruta del Norte’s, with the underground mine due to start production in 2027 or 2028.
The mining boom has not been without its detractors, however, including environmental and indigenous groups.
This week the country’s Cámara de Minería del Ecuador (CME) was accepted as a member association of the International Council on Mining and Metals (ICMM).
The CME was formed in May 1978 to lead the coordination and collective action of the Ecuadorian mining industry and promote best practice within the sector. The CME has more than 100 members, split between mining companies, service providers and affiliated individuals.
Ben Mace, President of the CME and Head of Country, Ecuador at BHP said: “With ‘Mirador’ and ‘Fruta del Norte’ going into production in late 2019, Ecuador is now a large-scale mining country. With this milestone and the future potential of this amazing country, it is important that the industry aligns itself with international organisations such as ICMM to ensure that the foundations are built on the basis of responsible mining. The Ecuadorian Chamber of Mines is proud to become a member of ICMM and we look forward to further embedding the principles for sustainable development performance across the mining industry in Ecuador.”
Tom Butler, ICMM’s Chief Executive Officer said: “We are also always glad to welcome new association members who can in turn help with knowledge sharing and learning, both to and from their own memberships.”
Published Date: 02/03/2020