EMN Highlights from 2008 NYSSA Conference

The NYSSA Metals & Mining Conference in New York, in early June, gathered mining executives from around the world who spoke about their projects, their resources or reserves, financial statements, and political stability in host countries.  The trend among most of the featured companies was similar.  Projects with the richest deposits were in risky countries, and low-grade projects were in the friendliest jurisdictions.  International Minerals was the only company with projects in Ecuador that participated in the conference.

Q&A with Victor Flores, Senior Mining Analyst HSBC, New York

In an exclusive interview, EMN talks with Senior Mining Analyst Victor Flores, the inaugural speaker at the New York Stock Securities Analysts (NYSSA) Eighth Mining and Metals Conference.  Flores explains how Ecuador’s April mandate affects investor confidence, and how mining firms may feel they must move on to develop projects in other countries.  He warns that mining projects in Ecuador can be delayed for years and compares the country’s political risk with that of the Congo.   

Silvia’s Ecuador Trip Diary: Entry Two

In this second of two installments, EMN Writer-Editor Silvia Santacruz shares the details of her pro-mining mission to Ecuador.  She offers a play-by-play of EMN’s pro-mining conference in Quito, including speeches made by various mining stakeholders who responded to EMN’s call to further unite in support of mining.  Included are her observations, photos, quotes from speakers, links to news clips, and videos.

Cementing Ecuador’s Poverty by Decree

Ecuador’s Constituent Assembly issued a decree halting all medium- to large-scale mining operations in the country for the next six months.  During her pro-mining mission to Ecuador, EMN Writer-Editor Silvia Santacruz witnessed how much a single junior exploration company can benefit the economy of impoverished communities such as Pucará, three hours from Cuenca.  While international investors lose confidence, and mining companies redefine their strategies and seek friendlier mining frontiers, the Pucarasenses simply wait.  

EMN Exclusive Article in Industrias Magazine

Industrias Magazine, a monthly publication of the Guayaquil Chamber of Industry, published in its March issue an EMN feature article, “Let’s Take Advantage of the Mining Opportunity.”  Authored by EMN Writer-Editor Silvia Santacruz, the five-page exclusive article stresses the importance of international investor confidence.  Specific article topics include the need for property rights and clear regulation, the threat posed by a windfall tax, and two remarkable LatAm examples: Chile and Peru.  “Ecuador can move from a \'Banana Republic,’ cocoa producer, flower grower, and oil producer to a prosperous mining one,” said Santacruz.  Spanish only  Link to Chamber layout

Silvia’s Ecuador Trip Diary: Entry One

In this first of a two-part series, EMN’s Writer-Editor Silvia Santacruz reveals the details of her pro-mining mission to Ecuador.  Silvia’s first stop was Montecristi, site of the Constituent Assembly.  There, she shares the results of her Investor’s Concerns Survey with key Assembly members.  Later, in Quito, Silvia begins organizing a pro-mining event with the help of stakeholders before taping a 30-minute TV news interview in Guayaquil.  Go to the interview [Spanish only]

MMP Proposes New Framework for Mining Exploitation

Assembly members of the Natural Resources and Biodiversity Committee welcomed MMP Minister Galo Chiriboga, who assured them that the exploitation of natural resources such as mining will help the country stop importing raw materials that can be exploited domestically.  He also proposed a new legal framework that enables the industry’s development under strict environmental controls, social benefits, and fair revenue sharing by the state.

Ecuador Won't Allow 'Childish Environmentalism' to Harm Country 

The Ecuadorian Government will prevent its country from falling into bankruptcy as a consequence of anti-mining and anti-oil groups, president Rafael Correa stated last Saturday during his radio address.  Despite the criticism, Correa was cautious not  to mention by name the Confederation of Indigenous Nationalities of Ecuador (Conaie), whose main representative, Marlon Gualinga, threatened a national strike if mining and crude oil extraction do not stop.  

Opinion:  Could Correa ‘Flip-Flop’ Create a Back Door for Mining?

Ecuadorian President Correa made what appeared to be flip-flop during his radio show, last Saturday.  He argued that the mining industry does not pay royalties, and the only obligation per-hectare fees ranging from $1 to $16, are sometimes unpaid.  Based on late fees, MMP minister Galo Chiriboga announced the revocation of 587 mining concessions, last Friday.  The Correa administration move may be deliberately sending mixed signals to create a distraction among anti-mining activists.

Mining Chamber Coalition Launches Lobbying Effort

Representatives from large- and small-scale Ecuadorian mining chambers will begin lobbying the Constituent Assembly tomorrow to highlight the industry’s key role in the country’s development.  The partnership will participate more actively in the drafting of laws or Assembly mandates involving the mining industry.  Yesterday President Correa criticized the current mining law, and announced the creation of a State Mining Corporation and the suspension of new mining concessions.  Current concessions will operate normally.

Windfall Tax Approved, Mining Law on Horizon

While it is unclear whether the 70 percent windfall tax on non-renewable resource extraction will include mining companies, the MMP Minister reiterated President Correa’s support for the industry and announced a dialogue with firms regarding the drafting of a new mining law.  If the windfall tax applies to mining firms, Ecuador will join Mongolia in discouraging international investors from keeping their holdings in the Andean country.  A mining analyst and an investor discuss their insights with EMN regarding this issue.

Details of Proposed Windfall Tax Unfolding

A newswire’s report regarding a 70 percent windfall tax on mining firms operating in Ecuador stunned the industry, precipitating a selloff in shares of junior exploration companies investing there.  As of today, Saturday, details of the tax law were still unfolding but EMN’s research and discussions with an industry group reveal some aspects of the tax law that investors and firms should know about.

“Windfall Tax” Issue Still Playing Out

Ecuador’s MMP has not yet confirmed a recent newswire’s report concerning a 70 percent windfall-revenue tax on mining companies.  Mining chamber representatives declined to discuss their position with EMN until their upcoming meeting with MMP Minister Galo Chiriboga.  The vice president of the 13-member legislative committee reviewing the tax bill and future bills is a familiar face: she is mining ally Maria Paula Romo of Alianza Pais.

Opinion: Green Light for Mining

Walter Spurrier, a renowned Ecuadorian economist, writes in Quito-based El Comercio newspaper about President Rafael Correa’s support for large-scale mining.  Spurrier suggests that the government create a negotiating team to deal with mining firms that have already invested in the country.  “The president should not miss this window of opportunity that gives him the power to legislate through the Assembly.  Companies are not going to invest in exploitation until the conditions of how to perform their activity are clear.”

El Comercio Prints EMN Viewpoint

Ecuador’s most influential publication, the Quito-based El Comercio daily newspaper, printed an opinion letter authored by EMN Writer-Editor Silvia Santacruz.  The piece outlines the positive effects that large-scale mining will have on Ecuador and argues for the Constituent Assembly’s enactment of industry-friendly regulations.  It also warns against extremist NGO agitation, calling for sensible regulation of these organizations’ behavior.

China Visit Adds to Correa Pro-Mining Position

In a move signaling his administration’s support for large-scale mining, last week President Rafael Correa invited Corriente Resources to participate in his trade mission to China, where he signed bilateral agreements covering different areas, including mining. The news arrives one week prior to the convening of Ecuador’s Constituent Assembly, which on November 29th will begin altering the rules for international mining companies operating in the Andean country.  Alberto Acosta's statements were dismissed by current MMP minister Galo Chiriboga.

Ecuador Loses Over a Decade of Mining 

Despite Ecuador’s sufficient mineral resources, the country has shown a persistent mining trade deficit during the last decade.  In 2005, this number jumped to USD $792 million, and it could reach USD $1 billion before 2010.  Delay in Ecuadorian mining development is three-pronged: development is opposed by green NGOs, the industry benefits from little state support, and mineral deposits are difficult to access.  Written by Julian Rosero of River Hill Resources and Ana Elizabeth Ortiz.

Some green NGOs have an inexplicable dark side: they oppose large private companies’ projects in developing countries regardless of their environmentally-friendly standards.  In turn NGOs prevent generous social responsibility programs from helping the poor, while NGO staff work comfortably from the most developed countries and spread misinformation campaigns on the Internet, capturing millions of dollars in donations.