Ecuador Weighs Bids for Exploration Projects in Mining Push

  • State miner Enami received partnership proposals: Minister
  • Authorities will start taking bids April 1 for new areas

Ecuador is evaluating bids from Australian and Canadian companies for copper and gold exploration projects as the OPEC member looks to reduce its dependence on crude.

The country’s state-owned miner Enami has received partnership proposals for several projects, Mining Minister Javier Cordova said in an interview. In a parallel process, authorities will start taking bids April 1 for new exploration areas, with the first licenses to be awarded by about midyear, he said.

The smallest member of the Organization of the Petroleum Exporting Countries overhauled a 2009 tax code that led to the exit of Kinross Gold Corp. and is looking to mining for an economic boost as oil revenues slump. With a handful of mines being developed -- including the former Kinross project now controlled by Sweden’s Funding family -- the government expects mineral exports to reach $4 billion by 2025.

“We see mining as the main driver of the economy going forward,” Cordova said from a Toronto conference on Monday. “We are focusing on creating the conditions to attract the necessary investment to make that happen.”

To reach its goal of becoming a top 10 copper-producing nation, Ecuador must bring in more exploration dollars to be prepared for when commodity markets recover, he said.

Codelco Partnership

Codelco, Chile’s state-owned copper giant, has already formed a partnership with Enami for the Llurimagua project and, according to Cordova, probably will work with its Ecuadorean counterpart on the Nanguipa project.

Enami has received interest from Australian and Canadian companies for the La Bonita project and from Canadian companies for its Pacto project, the minister said, without naming the prospective partners.

“Enami is in the process of evaluating those proposals and if an agreement is reached, it would go to the board for approval,” he said. “For each one we have a formal proposal.”

Codelco didn’t immediately provide a comment.

Ecuador’s national mining chamber says the country’s mineral deposits may contain more than 39 million ounces of gold, 88.7 million ounces of silver and 8.14 million metric tons of copper.

In 2014, Fortress Minerals Corp., controlled by Sweden’s Lundin family, agreed to buy Kinross’ idled Fruta del Norte gold project in Ecuador for $240 million. Kinross took a $720 million charge in 2013 when it halted development as Ecuador sought to increase taxes and after gold prices declined.

“The Kinross episode was a big blow to confidence,” the minister said. “We’re looking to move on from that and look toward the future.

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