Ecuador, Chile advance talks on US$3bn Llurimagua copper project

Ecuadoran state miner Enami EP and Chile’s state copper company Codelco are advancing talks on the US$3bn Llurimagua copper-molybdenum project in Ecuador.

“We are negotiating with Codelco a transaction in the ongoing arbitration litigation and we are in a very good spirit and mood to reach an agreement to form the company between Enami and Codelco and continue exploring this project, one of the largest and most important in Ecuador,” Ecuador’s energy and mines minister Fernando Santos told BNamericas.

In early January, Codelco suspended for the fourth time the arbitration process it initiated against Ecuador in 2021 before the World Bank's International Center for Settlement of Investment Disputes (ICSID).

Santos said Codelco representatives recently visited Quito to analyze mechanisms to make the project viable.

The talks now revolve around the hiring of an international expert to determine the value of the deposit's resources and specify the formation of the company, which would be 51%-owned by Enami EP.

Results of these two procedures would unblock the process because Codelco would have to invest the equivalent to its 49% participation, in line with the valuation, Santos added.

As both parties are interested in advancing the project, the expert could be hired this half, according to Santos.

Llurimagua covers nearly 5,000ha in Imbabura province and is expected to produce 210,000t of copper over a 27-year mine life.

The alliance would represent the first step in Codelco’s internationalization and help it maintain its status as top copper producer, considering that grades are depleting in Chile.

But the surrounding communities oppose the project.

Llurimagua is in the advanced exploration phase, while feasibility studies should be completed this year, according to Ecuador’s energy and mines ministry.