* Two miners set to invest $3 bln in copper, gold projects
* Miners have agreed to gov't demands- top mining official
By Eduardo Garcia
QUITO Nov 24 Ecuador's President Rafael
Correa said on Thursday his government is "within days" of
signing contracts with mining companies set to develop large
copper and gold projects in the mineral-rich Andean nation.
Deputy Mining Minister Federico Auquilla told Reuters
earlier this week that Canadian-listed Kinross Gold Corp and Ecuacorriente would soon sign contracts
for two projects worth $3 billion in total.
The negotiations have been long and difficult, in part
because the government was asking companies to pay an 8
percent royalty share, whereas miners were offering 6
"We're negotiating the contracts very hard ... They will
be signed in the next few days," said leftist leader Correa,
who has also renegotiated part of Ecuador's foreign debt and
oil exploration contracts with foreign companies.
The government is demanding advance payments on royalties
before the miners start extracting, the president added in
comments on local radio.
The extra income from advance royalty payments would be
used for social projects, including schools and roads, Correa
said. In power since 2007, he has made resource nationalism a
centerpiece of his policies and may run for another term in an
election due in January 2013.
Kinross plans to develop Ecuador's largest gold project,
Fruta del Norte, while Ecuacorriente - an affiliate of
Canada's Corriente Resources - will work on the Mirador copper
ROYALTY NOT YET DETERMINED
Correa did not say how much royalty the miners would be
paying, but mining sources familiar with the negotiations say
the final percentage will likely be closer to the figure
demanded by the government.
"Mining companies have agreed to the demands of the
Ecuadorean state and we're completely satisfied," said
Auquilla, the government's top mining official, during the
same radio show.
Correa has had a tumultuous relationship with foreign
investors throughout his rule, revising oil contracts to
better favor the government and defaulting on the nation's
He is striving to diversify the Ecuadorean economy from
crude exports, and he has taken a softer approach to investors
planning to develop mines than the oil companies with large
investments in the OPEC member country.
Ecuador has a nascent mining industry. Some larger
projects were initially delayed as Correa's government
tightened regulations for the sector.
Ecuador is also negotiating contracts with International
Minerals over its Rio Blanco gold-silver project,
with Ecuacorriente over its Panantza-San Carlos copper deposit
and with IAMGold , which plans to develop the
Quimsacocha gold-copper-silver mine.
High oil prices have allowed Correa to increase social
spending this year, which has fueled economic growth and
boosted his popularity among the majority poor.