UPDATE 3-Ecuador says wants to establish mining contracts

(Adds, details and mining industry reaction)

By Alonso Soto

PUEMBO, Ecuador, Nov 7 (Reuters) - Ecuador wants to establish contracts between the government and mining companies, similar to deals the country has with oil firms, Oil and Mining Minister Galo Chiriboga said on Wednesday.

"We want contracts that regulate the extraordinary revenues from these companies," Chiriboga told reporters. "They should be similar to current oil contracts."

He said contracts will set royalties at a referential price for the mineral extracted, but like with oil deals, mining firms will have to share part of their windfall revenues if metals' price rise in the market.

He added that mining royalties will be imposed on a "case by case" basis.

Chiriboga said contracts will establish stricter environmental regulations and boost the participation of local communities.

"We need to sit down and talk because the current mining titles are insufficient for us," he said. Government talks will be held while the mining ministry works on a proposal to set mining regulations in the new constitution, which has to be approved by a government-controlled assembly.

Mining companies currently have no contracts with the government or pay royalties, but an annual ownership fee for their concessions.

Cesar Espinosa, the head of the country's mining chamber, said companies are willing to work with the government to set clear rules.

"As an industry we know there is a great need for change... and we will work together with the government," Espinosa said.

Ecuador still has no major mining output for precious metals, but Canadian companies such as Corriente Resources (CTQ.TO)(ETQ.A), Iamgold Corp IMG.T0 and Aurelian Resources ARU.TO are exploring for gold and copper.

(Editing by Marguerita Choy)