2022 Evaluation of Ecuador’s Mining Sector

At the end of 2022, the mining sector is facing three scenarios which have been in constant growth since 2018. Firstly, as a result of the two projects of Mirador (copper) and Fruta del Norte (gold), along with the confirmation of preliminary results to begin the construction and production of at least four more mining projects (Cascabel, Curipamba, La Plata, and Cangrejos), mining production and exports have witnessed a constant increase, and mining exports now constitute the third highest in the non-oil sector. Secondly, opposition to mining through constitutional actions, such as protective actions and referendums, has led to the halting of mining projects, such as Loma Larga. This has been achieved through distorted messages to the public and disinformation to constitutional judges. Thirdly, there has been a constant increase of illegal mining on a national level, where the actions of the government are insufficient and demonstrate a weak state structure.

Since it first emerged in Ecuador, the acceptance of large-scale mining has been an uphill battle. It is evident that, in the face of a globalised world, Ecuador has made international commitments on climate change and environmental protection (COPs 21, 26, 27) However, it is also clear that the government has not been made aware of the need for efficient coordination to carry out the mining investments necessary to achieve the oft-mentioned Energy Transition. It seems they do not understand that Ecuador, along with the rest of Latin America, will be the region which contributes most to reaching the 2030 and 2050 goals.

In 2022, the indigenous uprising, the signing of the Peace Act, and the agreements from the round table no.5 had the biggest impact on the mining sector. The lack of coordination and contradiction surrounding what is important for economic and political development is evident. The development of opportunities lies precisely in these international climate change commitments, whereby the mining sector can become a generator of employment, human talent, economic benefits, and the development of zones of influence and their communities. This is what we call sustainable development, and evidence of this can already be seen from just two projects.

Thus, long-term actions are needed to transcend the government in office. The challenges for 2023 are extremely important as they can decide the future of our country. The action needed is in the hands of the government, who should also remember that they count on the support of actors and businesses in the mining sector.

And so, the big question is: what should the government do? This can be answered easily with two priorities. Firstly, the creation of a Ministry of Mining. There is an urgent need to have an entity specialised in mining which can consolidate investment and legal security and can make informed decisions. Second, mining investments in exploration and exploitation should be prioritised as a source of economic development in 2023. This will require two lines of action: firstly, aligning the Ministry of Environment, Water and Ecological Transition to comply with its attributions to grant environmental licenses and authorisations for water use, and secondly, leading a transparent process to consolidate the norm of free and informed prior consultation. This list of other necessary actions could go on, but those mentioned above will provide a start to relieving and boosting the sector.

We greatly look forward to the year ahead.

For more information on mining regulations and the resolutions of the Constitutional Court in 2022:

Legal Newsletter

By Elisa Morán, Director of the Department of Mining, Puente y Asociados

Latest Comments

No comments to show.

Recent Tweets

Comparte este post!