Ecuador is planning changes to the nation’s mining law regulating windfall taxes after contract talks with Canada’s Kinross Gold Corp. stalled, President Rafael Correa said today.
“We have to make it more reasonable,” Correa said in comments broadcast live on state-owned radio station Radio Publica. “We have the most demanding contracts in the world, but we have to be very demanding because the opportunities are enormous.”
Ecuador’s windfall tax, which gives the state 70 percent of mineral profits above a pre-negotiated base price, is the main reason Kinross is hesitating to sign a mining contract with the government to develop its Fruta del Norte gold and silver deposit in southern Ecuador, Santiago Yepez, head of Ecuador’s Mining Chamber, said in an interview today.
Fruta del Norte, discovered in 2006, is one of the world’s biggest gold discoveries, containing 6.7 million ounces of proven and probable gold reserves and 9 million ounces of proven and probable silver reserves, according to Kinross’s website.