Ecuador approves law to resume mining activities | Amazon Watch
Amazon Watch

Ecuador approves law to resume mining activities

January 13, 2009 | JEANNETH VALDIVIESO | AP

QUITO, Ecuador (AP) — Ecuador’s legislators have approved a bill that would resume mining activities suspended nine months ago and promote large-scale mining projects.

Environmental and Indian organizations immediately denounced the bill approved Monday night and accused the government of selling out to foreign interests.

The government says the new mining law will open the door to a potentially lucrative and traditionally underdeveloped industry in the small Andean nation.

Legislators approved the bill by a 50-15 vote and President Rafael Correa has 10 days to sign it into law.

The assembly that wrote Ecuador’s new constitution revoked nearly 80 percent of the country’s mining concessions in April, causing the stock of some companies to plummet.

At the time, Correa said the mining sector lacked controls and sufficient government benefits and was monopolized by a few.

The new bill establishes sufficient controls and environmental regulations and would create 300,000 new jobs, Ecuador’s Economic Development Commission President Irina Cabezas said Tuesday.

Cabezas told Teleamazonas TV station that criticism by social groups was “political.”

Indian activist Monica Chuji told Teleamazonas on Tuesday that the law was not sufficiently debated and said a slew of planned mining projects will infringe on the human rights of nearby communities and damage the environment.

Indian groups are planning a national protest on Jan. 20 and plan to sue to have the bill declared unconstitutional.

Following the April decree suspending most mining activities, 3,100 of Ecuador’s 4,112 active mining concessions passed to the hands of Ecuador’s government and 1,220 concession requests were canceled. Affected companies included Canada’s Aurelian Resources Inc., International Minerals Corp. and Iamgold Corp.

Those companies could resume projects under the new law.

Mining output in Ecuador is minimal. Large-scale projects have typically centered on nonmetallic minerals like cement, in the hands of Swiss-based Holcim Ltd and French Lafarge Cementos SA, among others.

The new law prohibits mining in environmentally protected areas, establishes public auctions for government contracts and government royalties “no lower than the amount” earned by the mining company, among other controls.

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