Social agreements seen to slow growth of Ecuador's mining sector

Ecuador’s metallic mining exports have been growing steadily since Ecuacorriente's Mirador copper and Lundin Gold's Fruta del Norte gold mines began production, but other projects expected to start in the next decade could be delayed because of social agreements.

Overall mining exports exceeded US$1bn in the first five months of 2022, according to latest data from the energy and mines ministry. Mirador exports totaled US$490mn and Fruta del Norte’s US$333mn, the rest being attributable to small miners.

Meanwhile, exports from Mirador and Fruta del Norte declined only in July, due to a national strike that blocked port accesses, Walter Spurrier, president of consultancy Grupo Spurrier, said at a webinar. Exports will pick up again, however, he added.

Mining exports are expected to overtake oil as the main export item.

However, agreements that ended an 18-day national strike in June could introduce some roadblocks. The government promised to not grant mining concessions until a consultation law was in place, which could take a year. It also promised to create a technical committee to review the environmental consultation proposal.

“The government should have drawn up its own prior consultation regulations and not give in to so many demands of [indigenous] confederation Conaie,” Spurrier said.

The La Plata (polymetallic), Curipamba (copper-gold), Loma Larga (gold-silver), Mirador Norte (copper) projects, part of the Mirador concession, and the Ruta del Cobre (copper), Cascabel (gold-silver-copper), and Warintza (copper)projects are in different stages and involve construction investments of US$11bn between 2023 and 2025.

Additionally, the Cangrejos, Panantza-San Carlos, Cóndor, and Llurimagua are advancing.

Construction at the Curipamba, La Plata and Loma Larga projects are expected to start next year.

Energy and mines minister Xavier Vera told journalists recently that Curipamba, La Plata, Loma Larga, Cascabel, Warintza and Mirador Norte are advancing, but he did not mention other projects.

Additionally, many permits local authorities handle remain pending and waiting times could increase until the consultation law takes effect. As example, Spurrier mentioned a delayed gold processing plant planned in Ponce Enríquez canton, Azuay province, to benefit small miners.

"Political events that bring uncertainty can dampen investors' interest," he said.