July 18, 2019 / 10:43 PM / 2 months ago

Ecuador begins large-scale mining at Mirador copper project

Ecuador's Minister of Hydrocarbons Carlos Perez (C) talks to the media as copper output begins at the Chinese-owned Mirador mining project in Tundayme, Ecuador July 18, 2019. REUTERS/Daniel Tapia

TUNDAYME, Ecuador (Reuters) - Copper output began at the Chinese-owned Mirador mining project in southern Ecuador on Thursday, a milestone in market-friendly President Lenin Moreno’s effort to boost the mining sector and wean the OPEC nation’s economy off its dependence on oil.

Ecuador, an Andean country neighboring No. 2 copper producer Peru, has large mineral reserves but is only beginning to develop industrial-scale mining projects. Mirador has an estimated 3.2 million tonnes of copper reserves, along with 3.4 million ounces of gold and 27.1 million ounces of silver

Ecuacorriente, a subsidiary of the Chinese consortium CRCC-Tongguan which has a 30-year concession to mine Mirador, says it expects to produce 94,000 tonnes of copper concentrate per year. The company has invested some $1.4 billion in the project and paid $85 million in government royalties, official data show.

“For the first time, with the Mirador project, Ecuador will produce copper and become an industrial-scale exporter of minerals,” Carlos Perez, Ecuador’s minister of energy and non-renewable natural resources, said at a ceremony marking the mine’s inauguration.

The CRCC-Tongguan consortium bought the company with the concession for the open-pit mine under former leftist President Rafael Correa, who deepened Ecuador’s economic ties with China. During Correa’s 10-year tenure, the world’s No. 2 economy invested in major electricity projects and lent billions in loans-for-oil deals with state-owned Petroecuador.

Moreno, who was elected with Correa’s endorsement in 2017 but has since earned his former mentor’s ire by shifting economic policy to the right, has focused on improving Ecuador’s investment environment to attract Western companies.

Other major mining projects in Ecuador include the Fruta del Norte gold mine, - operated by Canada’s Lundin Gold; the Cascabel copper, gold and silver mine, operated by Australia’s Solgold; and the Llurimagua copper mine, to be operated by Ecuador’s Enami and Chile’s Codelco.

Some of those projects have run into opposition from nearby communities, which are concerned about environmental damage.

Reporting by Jose Llangari in Tundayme; additional reporting and writing by Alexandra Valencia in Quito; editing by Luc Cohen and Leslie Adler

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