RE: australia's han**** digs in over ecuador mining oversight fee5 Jul 2025 05:21
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australia's han**** digs in over ecuador mining oversight fee
bnamericas
published: saturday, july 05, 2025
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australia's han**** digs in over ecuador mining oversight fee
australian company han**** prospecting pty has challenged ecuador's new mining oversight fee before the country's constitutional court.
han****, through its local subsidiary hanrine ecuadorian exploration and mining, is requesting that the inspection fee be declared unconstitutional in both form and substance.
the fee, established on may 31, is expected to generate around us$230mn annually, according to the government of president daniel noboa.
the administration argues that the funds will be used to combat illegal mining and strengthen regulator arcom in its oversight of more than 1.6mn hectares under concession in the country.
the new fee went into effect on july 1 and must be paid by holders of metallic and non-metallic mining concessions at all stages of the industry.
the rate varies depending on the phase and scale of the project and is applied per hectare of concession. for large-scale mining, the fee ranges from us$118/ha during the economic evaluation phase to us$470/ha during the production phase.
the fee has been widely criticized by mining industry representatives, who have called for a review of the calculation method and want it to be applied only from the mining phase onward.
in its legal filing, hanrine argues that the fee constitutes a tax that "contravenes constitutional tax principles."
the tax has serious flaws, including the fact that it seeks to collect a disproportionate amount of revenue compared to what arcom can spend, the company's mining and regulatory lawyer, stevie gamboa, told bnamericas.
gamboa added that arcom has traditionally operated with a budget of no more than us$10mn. last year, its budget was around us$7mn, and there is no transparency regarding how the new funds would be used, he said.
the lawyer added that the calculation mechanism is identical to that used for the concession fee. yet, no justification has been provided for why a supposed service fee should follow the same formula as a tax. a third issue is that the formula discourages exploration-stage projects.
"i believe this stems from a misunderstanding on the part of arcom about how the mining sector is developed, since the tax has minimal impact on large-scale projects already in operation, as it is not proportional to their economic production, but rather to the surface area under concession. on the other hand, exploration projects, which have no production, are not generating profitability, and are 100% risky investments, have large amounts of hectares under concession and will be greatly affected," gamboa said.
hanrine has owned the imba project since 2017. the project comprises five mining concessions l
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