The progress of several mining projects has prompted Ecuadoran authorities to work on public policies to streamline processes and controls, as well as ensure that royalty funds effectively reach the areas of influence.
Process automation, regulatory updates, instructions for loading, packaging, transporting and unloading concentrates, export controls and stricter requirements for obtaining marketing and export licenses are among the measures the authorities are working on.
“In 2025, Ecuador will advance toward a safer, more efficient and more transparent mining sector. We are transforming mining management, from small-scale to large-scale mining, ensuring legal clarity, control against organized crime and environmental sustainability,” deputy mines minister Rebeca Illescas said during an event on transparency in the mining sector held in Quito.
The official said the fundamental objective of current public policy is to have a consolidated, transparent mining sector with efficient public management, which will also help combat illegal mining, which is on the rise in the country.
Although Ecuador has significant geological potential, particularly due to its location in the Andes copper belt, and given that only 7% of its territory, approximately 2Mha, is under concession, political instability and a lack of state policies have hindered development of the sector.
Experts agree that the lack of a state policy, independent of the sitting government, is one of the main obstacles to the country developing its full mining potential.
Illescas acknowledged that the country’s political instability in recent years has affected the sector, with constant changes in officials impeding long-term planning.
“If we don’t have an institutionalized policy, there’s very little we can do, regardless of the authority. That’s why we must plan for the long term, regardless of political circumstances, respecting socio-environmental weaknesses and sensitivities, establishing ongoing dialogue with diverse stakeholders, taking into account the country’s vast diversity and the fact that mining in Ecuador is more complex than in other countries,” she said.
The mines department is working on its 2025-36 strategic mining plan, which includes, among other topics, digitizing the mining archive to improve access and efficiency, as most documents are currently only physical. It also seeks to align public mining policy with local realities and a sustainability focus.
Regarding royalties, the goal is to ensure that they reach communities in the area of influence of mining projects more directly and effectively, and new regulations will be issued in the coming days.
Ecuador’s runoff vote will be held this Sunday (April 13) to decide who will be president for the next four years. Voters will choose between the conservative Daniel Noboa, who is seeking reelection, and Luisa González, an ally of former leftist president Rafael Correa (2007-17).
Local analysts believe that whoever wins will boost the mining sector. However, in recent weeks, following an agreement with the country’s largest indigenous organization, Conaie, which offered her its support in the runoff, González spoke of a mining moratorium.
Noboa has promoted several measures to support the mining sector during his administration, which began at the end of November 2023 to complete the term of Guillermo Lasso, who dissolved the legislature and called early elections.
Exports and self-generation
For this year, Ecuador expects its mining exports, including small and large-scale mining, to grow 10-14%, Illescas told BNamericas.
Mining exports totaled nearly US$3.3bn in 2023, and they were expected to surpass that figure in 2024. However, according to preliminary data from the central bank, there was an approximately 8% decline last year.
The drop was mainly due to the acute energy crisis that shook the hydropower-dependent country amid the worst drought in 60 years. This forced the Noboa administration to implement electricity cuts of between 12 and 14 hours per day nationwide starting in September, and in the last half of December to ask the seven largest electricity consumers to disconnect from the national grid.
Among the large companies that had to shut down were the operators of the country’s only two large-scale producing mines: Lundin Gold, which has the Fruta del Norte gold mine, and Ecuacorriente, owner of the Mirador copper mine.
The most affected company was Ecuacorriente because it barely had 4MW of self-generation capacity compared to its 87MW requirements, while Lundin Gold began acquiring diesel generation in 2023 to use in case of electricity emergencies, and in December of last year activated its maximum self-generation power capacity of 11MW, of the 18MW it demands, in addition to adopting a series of administrative measures to optimize processes.
Illescas said Ecuacorriente is importing around 40MW of thermal generation to avoid potential problems this year if a drought affects electricity supply.
In addition, the Chinese-owned company is working on alternatives that will allow it to self-generate the power needed for the current mine and its expansion, known as Mirador Norte.
“They can’t increase production without electrical solutions. The company is working on that, and we hope they present us with definitive solutions,” Illescas said.
https://www.bnamericas.com/en/analysis/ecuador-looking-to-establish-long-term-state-mining-policy