Ecuador Says BHP, Billionaire Rinehart Join Metals Chaseby
BHP has interest in Llurimagua copper project, minister says
Fortescue’s Andrew Forrest traveled to nation: ambassador
BHP Billiton Ltd., the world’s largest miner, and billionaire Gina Rinehart’s Hancock Prospecting Pty. are among commodity producers to have held talks over a potential entry into mining and exploration projects in Ecuador, according to the nation’s government.
Both producers had discussions with officials on the prospects of making investments or securing exploration leases, Mining Minister Javier Cordova Unda said Tuesday in an interview in Melbourne. Cordova has met with BHP personally, he said.
BHP has shown interest in a number of copper projects, including in a potential partnership with state-owned miner Enami and Chile’s Codelco in their joint Llurimagua copper and molybdenum project, Cordova said. Fortescue Metals Group Ltd. Chairman Andrew Forrest has traveled to the nation in recent months and met with Ecuador Vice President Jorge Glas to discuss the Perth-based company’s exploration, Ambassador to Australia Raul Gangotena said.
BHP’s exploration program includes work in the Americas and the producer is seeking partnerships, the company said in an e-mailed statement, declining to comment on any specific discussions.
Fortescue, which has tenements in Ecuador, “continues to undertake early stage, low cost exploration and to assess business opportunities in Australia and internationally,” Chief Executive Officer Nev Power said in a statement. Hancock Prospecting didn’t immediately respond to requests for comment.
“These are names that are leaders in the industry and to see them not only looking into Ecuador, but already giving the first steps to investing is encouraging,” Cordova said, speaking on the sidelines of the International Mining and Resources Conference.
Hancock has held meetings in Ecuador and visited four times in the past year, while BHP has held talks with the ministry and partners in the Llurimagua project, he said.
BHP advanced 1.2 percent to 1,236.50 pence by 8:32 a.m. in London. The stock earlier gained 2.6 percent in Sydney trading.
The biggest miners are racing to secure exploration projects in Ecuador to tap its undeveloped copper and gold deposits as output from aging mines, including in South America, begins to decline. Copper is forecast to fall into a market deficit by the end of the decade amid rising demand and a lack of sufficient new operations.
Newcrest Mining Ltd., Australia’s biggest gold producer, fought off interest from BHP last month to agree to pay about $22.8 million for a 10 percent stake in SolGold Plc, a Brisbane-based explorer with a copper and gold project in Ecuador.
Competition for quality exploration projects is likely to intensify as the hunt for new assets becomes harder, Newcrest Chief Executive Officer Sandeep Biswas told reporters Tuesday in Melbourne.
About 10 percent of Ecuador has been explored, meaning there are opportunities for major new discoveries, according to Cordova. The country has also revised tax laws, created a mining ministry and is upgrading infrastructure in a bid to woo investments, he said.
“This is the perfect time for us and the industry,” Cordova said. “It’s the reason why the likes of BHP are looking around, because many of the projects in Chile are declining and they are looking for new opportunities.”
Ecuador expects producers to make at least $8 billion in investment in new mines by 2024, according to Cordova. “I strongly believe that those numbers are going to be much higher,” he said. “We are seeing now a lot of interest in Ecuador and it’s very encouraging for us.”