Q&A with Ecuador’s Central University Jaime Jarrín, PhD

During her recent trip to Ecuador, Silvia Santacruz interviewed the new Central University’s Dean of Engineering Geology, Mining, Petroleum and Environment Faculty. Dr. Jarrin has become one of the country’s pro-mining leaders, constantly confronting Ecuador’s anti-mining opponents. Dr. Jarrin acknowledges Ecuador’s oil experience has been negative, with little or no social impact. Nonetheless, the mining industry development will be completely different thanks to the new Constitution and Mining Law, which guarantee revenues reinvestment.  

Global Mining Finance LatAm Round Up 2009-10

Despite slashed metal prices, and with mining companies’ market caps more than halved by the fourth quarter of 2008, global stock exchanges registered record highs as confidence made a sudden recovery in 2009. Latin America achieved record highs in the Toronto’s two exchanges with $ 3bn raised. Once again, Chile, Mexico, Peru, and Brazil scored as the most stable jurisdictions, while Venezuela, Ecuador, Guatemala, Honduras, and Bolivia carried on as the worst performers, according to The Fraser Institute.  Download GMF LatAm report

New Regulations Lift Mining Ban, Uncertainty Persists

After 19 months of the infamous mining mandate few survivor firms were allowed to turn their drilling machines back on.  Mining regulations, with a six-month delay, were finally published in the Official Gazette last month.  Although the industry has welcomed the good news, regulations are still ambiguous in two crucial terms: the already high 5% minimum royalty still lacks of a maximum, and the 70% WFT has no base price parameters.  Both numbers are to be determined in individual exploitation contracts.

Ecuador’s Mining Future Still Uncertain

Fifteen months after Ecuador’s Constituent Assembly issued the mining mandate which halted the country’s large-scale mining operations, the industry continues waiting to resume its activities. The new mining law was published on January 29, but the mandate continues to be in effect until the law regulations are approved by the new124-member National Assembly.  In the meantime, the industry has increased its red tape by requiring water and environmental permits, drafting a National Development Plan to determine which areas are to be open to mining.  Ecuador’s mining future is still uncertain.

CEI and EMN Launch “UnderMining Prosperity” Video

The Competitive Enterprise Institute (CEI) and Ecuador MIning News (EMN) today launched their inaugural natural resources-themed video titled UnderMining Prosperity.  The video, which features metallic mineral mining in Ecuador as the setting, is available on YouTube and also in Spanish under the title Oportunidad Bloqueada.  Responsible, large-scale natural resource projects in the developing world can alleviate poverty, create jobs, spur development and assist economic growth.  Regrettably, in many underdeveloped countries the freedom to manage natural resources is denied by environmental extremists.

Q&A with Victor Flores, HSBC Senior Mining Analyst 

Ecuador Mining News had an exclusive interview with New York-based HSBC Senior Mining Analyst Victor Flores during the annual NYSSA Metals and Mining, last month.  In the exchange, Flores states that the negotiations between Kinross and the Ecuadorian government will determine the nation’s mining future.  "If Kinross successfully negotiate a tax favorable to both sides, and can develop FDN, Ecuador’s doors are open to international mining operations.”  Flores also says that the minimum 5 % royalty is already very high, while the 70 % windfall tax only creates uncertainty.   

State-Owned Company to Operate with Revoked Concessions

More than 13 months after the Constituent Assembly’s April 2008 mining mandate, large-scale mining projects in Ecuador have yet to recommence.  President Correa has made recent – and repeated — statements praising Canadian firms’ environmentally friendly mining techniques and welcoming new international investors.  Yet, the investment community faces another threat: the yet-to-be-created state-owned National Mining Enterprise.

Ecuador’s New Mining Law No Panacea

Ecuador’s MMP minister Derlis Palacios visited the Congresillo last Wednesday, November 19th after presenting the mining law the prior Friday.  The new mining law is not a panacea.  It creates new oversight agencies and a 5 percent minimum sales royalty, confirms the 70 percent windfall tax, and encourages firms to opt for service contracts rather than individual exploitation contracts.  The bill also gives the government the authority to cancel concessions or contracts if any human right is violated, or if the natural habitat suffers irreversible damage.  EMN has translated some articles in the Mining Law, and also commented on some of them.