NEW YORK, June 5 Ecuador plans to change its
mining law and offer tax incentives to attract foreign investors
and spur investment in the stalled sector, a cabinet minister
said on Thursday.
The government will adjust a windfall tax, which helped
scuttle Canada's Kinross Gold Corp's investment in a
major gold mine, and make changes to its mining law.
"These incentives will allow us to offer viable conditions
for some projects and overall will help attract investment in
all different steps of the process," Strategic Sectors Minister
Rafael Poveda told reporters.
These changes should help spur gold, silver and copper
projects that have not gotten off the ground because of concerns
about heavy taxation.
Kinross last year pulled out of Fruta del Norte, Ecuador's
largest gold mine, saying the government had refused to
compromise over a 70 percent windfall tax.
The sector has not received any foreign investment for the
last year despite a previous government effort to ease fiscal
terms to attract investors.
Mining projects in Ecuador face among the highest tax rates
of any in the region, with the government's take of around 51
percent, according to a study by consulting group Wood
Ecuador hopes to reach an agreement in two months with a new
strategic partner for the development of Fruta del Norte, which
holds reserves of 6.7 million ounces of gold and 9 million
ounces of silver.
Companies from Russia, China and Canada have expressed
China's Ecuacorriente, the only mining company that has an
active contract with Ecuador, is developing the Mirador project
that will require some $1.4 billion in investment.
President Rafael Correa hopes to turn the mining sector into
a driver of the country's economic growth.
(Reporting by Alexandra Valencia, writing by Brian Ellsworth;
Editing by Marguerita Choy)