QUITO (Reuters) – Ecuador needs clear nation-wide industrial regulations in order to attract foreign investment in its mining sector, the head of the country’s industrial association said, as local referendums organized by the community slowed down the development of mineral deposits.
Citizen-led voting measures by environmental activists and indigenous communities have presented a growing challenge to a sector President Guillermo Lasso is keen to develop as part of efforts to boost a sluggish economy.
Industry concern grew after citizens of the city of Cuenca voted in February to ban future mining activities near rivers. A recent court ruling has left the door open in Quito, the capital, to organize a similar voting initiative.
“The country must provide a secure and clear legal framework to continue to attract foreign direct investment,” Nathan Monash, head of the industry association, Ecuadorian Chamber of Mines, said in an interview on Wednesday evening. .
“We believe that these local consultations cannot decide on questions of national interest and which fall within the competence of the central government.”
Ecuador has abundant mineral reserves, but has lagged behind other Andean countries such as Peru and Chile in developing large-scale mining.
Referendum organizers say mining projects threaten watersheds, do not respect indigenous peoples’ rights, and do not provide sufficient benefit to local communities.
Former President Lenin Moreno had hoped that five mining projects initially budgeted at some $ 7 billion would help move the sector forward. But two, including the San Carlos Panantza cooper mine, are completely shut down, and a third is relocating some facilities due to local opposition.
Lasso, a former banker, said he would respect concessions already given to private companies and ensure they comply with environmental regulations.
“It is important to have a common vision of how the mining sector is going to develop,” said Monash. “We are talking about a mining policy aligned with the president and his entire cabinet.
Other mining projects are in advanced exploration, including the Cascabel project, granted to the Australian SolGold Plc. In addition, the Loma Larga gold project of Canadian company INV Metals Inc could go into production while Lasso is in operation.
Report by Alexandra Valence; edited by Jonathan Oatis