Ecuador is moving forward with
plans to move from an explorers hotspot to mining exporter as the country’s
only large-scale copper mine readies to ship its first large cargo in November.
The $1.4 billion Mirador open-pit mine, owned by a joint venture of Tongling Nonferrous Metals Group and China Railway Construction (EcuaCorriente), began operations in July, but it slowed down earlier this month as a precautionary measure 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.