Mining minister interview27 Nov 2019 18:22
Interview with Fernando Benalcázar, Vice Minister of Mining.
What perception do investors have about mining in Ecuador?
Ecuador is seen as an investment destination. The best indicator is that in the first half of this year, 61.4% of foreign direct investment came from mining.
Ecuador presented its mining policy in Australia at the end of October. Is there interest from companies in that country to participate in mining in Ecuador?
The shareholders who are in Ecuador are happy with what Ecuador has offered them, they are aware that there are problems like anywhere in the world. The manager of Sunstone (Australian mining company exploring in Loja) told me that if the Government of Ecuador had not introduced the change to the regulation that allows for early drilling, the company would not stay in the country. With the change, which occurred in February 2019, the firm was able to do limited drilling and accelerated the initial exploration phase to an advanced exploration phase. With this company alone there are already USD 30 million invested. In addition, we are looking for new prospects, we are negotiating three or four new projects, especially gold. In the country there are five Australian companies that have invested USD 1,131 million in exploration.
Do requests for popular consultation to ban mining in Azuay and the situation of Río Blanco worry Australian investors?
The previous year they were worried, not this year. When the Constitutional Court denied the request in Azuay, it created a very positive background for the mining industry. The entity established that only if there are conditions that justify a violation or possible constitutional damage will these requests be accommodated. With this, the Court gave a clear message that it is not just about wanting or not wanting mining.
What will be the participation of mining activity in GDP this year?
We expect it to be 1.72%. By 2021, the mining GDP is expected to be 4%, that was planned and maintained.
How does the paralysis of the Río Blanco project affect mining GDP estimates?
Río Blanco is suspended. It is worrisome because it is a project that can contribute 59,000 ounces of gold a year to national production and projects shipments for USD 635.56 million until 2028. It is suspended due to a legal issue.
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