Ecuador Hints at Changing Mining Laws

El Comercio reported last week on Ecuadorian President Rafael Correa’s recent speech against mining concessions in Ecuador. Correa described the way the previous administration issued them as a disaster, and said that his government will review every single one of them. He said that that around 4,000 concessions have been issued, but that they have "created chaos and that certain areas they are on the brink of a civil war."

Correa also stated that communities are often not consulted in the issuing of the mining concessions, and that "the law needs to be changed to guarantee collective rights." According to the Web site "Ecuador will create a Constituent Assembly to reform the constitutional law regarding foreign investment in the country so the state will be able to assume 70 percent to 80 percent of the earnings from the oil and mining sectors, Government Minister Gustavo Larrea said May 24. Private companies holding majority stakes in oil or mining operations will then be left with 20 percent to 30 percent of the earnings. Despite this announcement, Larrea said Ecuador does not have any plans to nationalize the two sectors."

This comes amidst the recent government decision to reject the environmental impact study of Canadian mining company Corriente Resources, leading the government to issue a stop work order. A similar stop work order was issued against Ascendant Copper in December 2006.