In the Ecuadorian mining sector, there is concern about the narrow growth projections of the country’s economy, which would be mainly due to the end of oil production from the Block-43 ITT, after a public consultation, and the effects of the El Niño phenomenon. This is according to an analysis carried out by the Chamber of Mines of Ecuador, which bases its uncertainty on the latest update from the Central Bank, which predicts that the country will grow by 1.5% and only 0.8% in 2024.

In this context, the union indicates that mining is called to be an activity that reverses the situation by attracting more investments to the country, but they regret that the sector is currently faced with growing political, legal and social risks that hinder its success, because they seek guarantees of stability and legal security for the continuation of business.

Mining sale for $190 million registered in 2022 alerts industry amid legal tussles

Between 2018 and 2022, revenue from mineral exports increased tenfold; In 2022, 2,775 million dollars were registered, according to data from the Central Bank, with a growth of 32.64% compared to what was registered in the same period in 2021; behind only oil, shrimp and bananas.

In terms of employment, by the first quarter of 2023, mining has generated 46,028 direct jobs and 126,085 indirect jobs. Likewise, according to the figures of the Ministry of Energy and Mining, from January to May 2023, 465 million dollars were collected in sectoral and general taxes, for conservation patents, royalties, profit, income tax, VAT and others, according to the chamber, which emphasizes that these growth generated by two large mines operating in the country.

“In the future, the projection is that more projects will start operating… It is estimated that by 2029, with the entry of these new projects, mining exports will reach a total of 9,217 dollars,” the Chamber estimates. However, there are currently more than 176 projects from all sectors, including mining, that are paralyzed by admission to the anti-constitutional lawsuit against Regulation 754, which does not allow them to progress in obtaining environmental permits. This group includes hospitals, water treatment plants, power transmission projects, shrimp farms, tourist farms and more; which envisaged more than 2000 million dollars of investment.

“The mining opposition has begun to affect not only the industry it is fighting against, but also other productive sectors,” the union complained.

Orellana province, home to the Yasuní oil producing block, voted not to leave it underground

Specifically in the mining sector, the Curipamba projects in Bolívar and La Plata in Cotopaxi have been paralyzed due to a lack of environmental permits. In the case of the Loma Larga project in Azuay, the decision of the Provincial Court of Justice of Azuay has been suspended pending preliminary consultations and then environmental consultations. These three projects alone amount to almost 1,000 million dollars of investment.

Illegal mining: Camps have been identified in 17 of the 24 provinces

Added to this is the impact of illegal mining. According to the Chamber, based on figures from the Agency for Regulation and Control of Energy and Non-Renewable Natural Resources, the progress of illegal mining is alarming, as camps have been identified in 17 of the country’s 24 provinces.

In conclusion, the Chamber of Mines assures that “the future of the country cannot be conditioned by popular consultation and court decisions promoted by certain sectors that do not represent the entire population, and even less the areas that need this income the most.” .

The military locates facilities for illegal mining activities on the northern border of Esmeraldas

They point out that some of these decisions are made years or decades after the companies have already established their research operations, representing investments of millions of dollars, because of which investors perceive a high risk in unloading their capital and prefer to leave. Because of this, the country faces some international arbitrations; If it is resolved unfavorably for the state, the state must pay millions in compensation, they warn.

“Banning legal and formal mining activities will not stop the exploitation of resources, on the contrary, they increase the threat of the advancement of illegal mining and related crimes such as human and species trafficking, illegal logging, drug trafficking. , soil and water contamination, among others,” says the union.