Ecuador’s mining future

The new mining law of Ecuador will significantly change the rules of the game for extractive companies.   According to article 410 of the proposed constitution, if approved, Ecuador’s new constitution will cause mining companies to share a minimum 65 percent of its profit with the state:
“The State’s participation in the profits arising from the utilization of these (non-renewable) natural resources shall not be less than that of the company exploiting them.”

What would be interesting is to see how will this affect previous and future investments in that country.  How will that change the mining scenario for the existent investors who entered the scene under different rules, and how will that cause them to seek greener pastures elsewhere?

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La Camorra and Isidora in the hands of Rusoro and the Venezuelan State

Back in July Rusoro was confirmed as the partner of choice of the Venezuelan Government for gold exploitaition projects in that country.  Today,  it has been announced that Rusoro has entered a partnership with the Venezuelan Goverment to mine La Camorra and Isidora in the State of Bolivar, Venezuela.

This comes a result of a “Mixed Enterprise” between the company and the Government, with a 50/50 participation. 

The Isidora project alone reflects the following data:  Proven and Probable Mineral Reserves at Isidora (March 200 are 168,000 oz Au (161,900 t @ 32.3 g/t Au). Mineral resources for Isidora are 331,000 oz Au (470,000 t @ 21.9 g/t Au) of Measured and Indicated and 45,000 oz Au (99,000 t @ 14.1 g/t Au) of Inferred.

Related article in Spanish

Paraphrasing Jack Caldwell: “Bad laws make for bad mining. Or no mining at all”

I cannot say enough about this posting.  So I suggest you all go check it yourselves.  Again, worth repeating: “BAD LAWS MAKE FOR BAD MINING. OR NO MINING AT ALL”  In my dreams: Latin American leaders, please take note and see if the shoe fits… 

 

What Latin America needs is mining for development, not lousy legal traps to make things stall.

 

Original posting

Canadian company brings water to 20,000 people and issues property titles in Nicaragua

Central Sun Mining will help provide drinking water for 10 communities surrounding their mining projects (Minas Orosí & Mina Limón).  The company will provide logistic support, workforce and equipment for the project.  The total expense nears $1.5 million and was a donation of the Canadian Water Fund.

 

Additionally, Central Sun Mining will also give its workers property titles to the land where their homes are, thus turning them into homeowners. Kudos!

 

Full article in Spanish

Paraguay leader opposes mining concession statute

Elvis Balbuena, Chair of the Public Works, Services and Communications Commission, asked authorities to exercise caution regarding the two statutes on mining concessions for exploration and exploitation.  He argues that as they are written these laws relinquish their national sovereignty.

 

Full article in Spanish

Epsur and Franklin Mining engage in joint venture in Argentina

William A. Petty, Chairman and President of Franklin Mining, Inc. announced that the company he represents signed a Letter of Intent with Epsur for future development of oil fields in the northern part of Argentina.

The company has yet to release any specifics about this Letter of Intent, so check in again at a latter time for more information.

Full release

Ecuador reaches out to India for mining investment

According to Ecuador Ambassador to India, Carlos Abad, the Ecuadorian government has engaged in conversations with private companies from India in search for insvestors for the soon-to-bloom mining sector of that country.   That is good news from the investment standpoint.  It’s important for the government of Ecuador to acknowledge the importance of working with experienced investors - I just wonder what does that mean for all Canadian companies that are already in the country.  Is President Correa trying to replace them, or is he just trying to open the doors to foreign investors?  The first scenario would pose a bad precedent for investors, whereas the latter would generate a general sigh of relief for those who already have, or were planning to invest in Ecuador.

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New leap of faith for the Ecuadorian mining industry - Aurelian nets nearly $1 billion

Washington, D.C., July 31, 2008 — Kinross Gold Corporation’s (TSX:K; NYSE:KGC) $1.2 billion takeover bid for Aurelian Resources (TSX:ARU) has elicited mixed reactions among ARU and KGC investors alike. While the junior mining company’s shareholders complain that the offer is too lowball for their mega-rich Fruta del Norte (FDN) project, one of the most important worldwide gold discoveries in the last decade, Kinross stocks fell 10 percent, last July 24th, when the deal was announced. In contrast, ARU shares climbed 42 percent. Read ARU and Kinross Friendly Combination The billion-dollar-plus offer for Aurelian is the most significant private agreement that has ever been announced in the history of this Andean nation, which has a promising nascent mining industry at least with respect to resources. The Kinross bid is the first one ever made by one of the majors. Ecuador has attracted Kinross, the third largest gold producer in North America, in the midst of political turmoil. The offer was made just two days prior to when Constituent Assembly operations are scheduled to end, and one month before Ecuadorians give the red or green light to the new constitution through a referendum next September 28th.

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Investors welcome!

Mexico seems to be opening its arms wide open to foreign investors.  Way to go!  Old mines closed in the 1920’s are luring in investors to take their chances.  If some investors bite, this would boost small village economies, in areas long forgotten.

Full article in Spanish.

Rio Tinto operation in Brazil grows by 2 billion!!!!

Rio Tinto is now announcing its expansion in Brazil.  The London-based company will invest over 2 billion dollars to expand iron ore production in Brazil.  Increasing demand in South America and the Middle East is the cause for the expansion. 

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