Ascendant’s Mining Days in Ecuador May Be Numbered

Several hundred mining opponents, many carrying colorful banners, marched into the town square of Garcia Moreno, Ecuador on May 20 for a region-wide assembly concerning the mining activities of Canada’s Ascendant Copper Corporation.

A declaration signed by all of the Parish presidents of the Intag region was read to the crowd, which Ecuador’s daily newspaper, El Norte estimated was close to 1,000 people. The declaration demanded that the company depart immediately.  Polibio Perez, the president of the council of communities, said the company would have until June 4 to leave.

The majority of speakers at the four-hour event denounced the company and the environmental destruction the proposed mine would bring.  Chants of "the people united will never be defeated" were repeated after each anti-mining speaker.  Only two people spoke in favor of the mine.

ImageGary Davis, President and CEO of Ascendant, downplayed the significance of the event. He said that according to three independent journalists (he was unable to recall their names) and company personnel the numbers didn’t exceed 180 people – a huge disparity from Upside Down World, El Norte, and local police estimates.

Edmundo Lucero, the president of Junin, has been baffled by Davis’ refusal to recognize the magnitude of the company’s opposition.

"He’s lying," said Lucero. "Why?  Why can’t he tell the truth?"

Davis did concede it’s sometimes difficult to get good substantiated facts. "This is Ecuador and the difficulty I have here quite often is people are telling me what I want to hear," he said.

But, Glen David Kuecker, an associate professor at DePauw University said he agrees with Lucero’s assessment.  He has been doing research and writing about Intag since 2000, well before the company arrived.

"Gary Davis’ representation of the event is entirely consistent with his proven capacity to misrepresent the local reality in the Intag region, as well as mislead the investing public," said Kuecker. "The Intag I know is equally persistent with saying in a loud and united voice – no to mining."

ImageOther mining opponents have also suggested that Davis is fudging the facts and numbers to shield the harsh reality of what’s happening on the ground from the company’s shareholders.  But Ascendant’s president doesn’t believe these recent developments will hurt the project.  He said the company will stay the course.

"We have no intention of leaving," said Davis.

But, residents of Junin are on record saying mining will only happen "over our dead bodies." Several assembly participants suggested that if Ascendant doesn’t leave by the announced deadline they would organize roadblocks from Otavalo to Garcia Moreno, much like the indigenous free trade/occidental roadblocks which effectively shut down the country in March.

Oxy Today, Ascendant Tomorrow

Recent political developments in Ecuador have sent shockwaves to boardrooms and investors around the globe.  Multinational corporations were put on notice when the Ecuadorian government decided to expel California based Occidental Petroleum Corp. (Oxy) for violating its contract with the country.

Gloria Chicaiza, The Coordinator of the Ecological Mining Action Campaign believes the government’s decision regarding Occidental was just. "Oxy violated the law and the government sanctioned them for this violation." She said Oxy should be investigated for its human rights violations and environmental record in the country.

"I think that what happened with Oxy sets a good precedent," she said. "In Ecuador it wasn’t just Oxy which violated the laws…Ascendent, for example, before it entered Intag already had [been involved with] various conflict in indigenous territories in the Napo province where it also has concessions…and also works with trickery and dishonesty."

ImageOxy accused the government of succumbing to nationalist fervor. But the company was hugely unpopular in Ecuador, especially among indigenous groups because of the environmental consequences of the company’s operations.  In the end it came down to a legal matter and the Ecuadorian government exercising its sovereignty.

"It certainly does not help international investment in Ecuador," said Ascendant’s Davis. "It sends a signal that international investment is tenuous in this country, although I don’t personally believe that to be the case."

Ecuador’s unstable political environment was previously raised with the Toronto Stock Exchange by the Intag Solidarity Network-USA (ISN) and Defensa y Conservacion Ecologica de Intag (DECOIN) as a reason not to list Ascendant.

"The stock Exchange ignored these concerns and the investing public is largely unaware of the investor risks inherent to Ascendant," said Kuecker, who is also a member of ISN. "Oxy illustrates investors could lose their shirts investing in extractive industries operating in an uncertain and frequently changing political climate."

ImageDavis admitted that it is possible the Occidental decision could harm his company’s operations in Ecuador, but he is still optimistic.  A recent article in Resource Investor, an on-line news-site covering the extractive industries and geared toward investors says the mining industry will take a hit.  The article suggested that miners "could face similar treatment and could be vulnerable to government takeover."

In addition, the recent announcement that Luis Macas, president of the Confederation of Indigenous Nationalities of Ecuador (CONAIE) will run for president of Ecuador could spell more trouble for U.S. and multinational corporate interests in the country.  The indigenous leader, like Bolivia’s Evo Morales, opposes free trade deals and other types of foreign investments that would not benefit the public.

Cyril Mychalejko is the assistant editor of and is currently based in Ecuador.