Mining – with estimated exports of $3 billion by 2023 – has become one of the fastest growing sectors in the economy, the fourth largest export sector, the third non-oil sector and the first non-traditional sector. The executive president of the Chamber of Mines, María Eulalia Silva, sees the way out of underdevelopment and for Ecuador to be a key player in the mineral-dependent energy transition, since an electric car consumes four to eight times more copper than a fossil fuel car and a wind antenna requires the least four tons of copper.

Mining is predicted to be one of the fastest growing sectors, what does this mean for the industry?

In 2022, the entire mining industry exported 2775 million dollars. We don’t have the numbers for 2023 yet, but we believe it will be around $2,800, $3,000 million. What does that mean? That it is the sector of the economy that grows the most.

There is a contribution from small-scale mining of about 25%, 30%, but the really big players in changing those numbers were the two industrial mines. Mining is already the fourth export item from 2022, the third non-oil item and the first non-traditional item, with only two mines.

Industrially responsible mining shows the transformational capacity it has with only two large mines. For example, the Peruvians massively have more than 60, the Chileans about 200, we have only two and those two that started production a little more than four years ago, from the second half of 2019 to the first half of 2023. They exported more than 5000 million dollars.

What are the benefits of the areas where these two large mines are located?

These two mines located in Zamora Chinchipe are responsible for that province doing what no one else has been able to do in the country in recent years, reducing poverty. From 2019 to 2021, in Zamora Chinchipe poverty decreased by 13 points. Those influential communities live better: the average education of people has increased in the influential areas, the enrollment of children in universities has doubled. Last year, we generated around 180,000 direct and indirect jobs.

Esther, Briggith and Elsa challenge the daily work at the Fruta del Norte mine and processing plant.

If the two mines generated $5 billion, what would it take to generate more revenue?

Some things are necessary. The full implementation of environmental consultations is required, environmental permits have been issued, a number of permits have been unlocked that are particularly slow in Ecuador, the mining cadastre must be opened, legal and physical security must be ensured, in general. In particular, the mining industry is long-term, the exploration phases last many years, before the mine is built, between the exploration, feasibility, mine construction phases, for the mine to start producing, 15, 18, 20 years must pass.

Will the current situation the country is going through scare investors?

The situation of uncertainty definitely always scares away foreign investors in mining and any other industry, but we believe that this is a golden opportunity to clean it up once and for all. Organized crime has affected various levels of the state and various economic activities, and one of them is the illegal extraction of ores, so if this is how it needs to be cleaned, kudos and the Chamber has publicly expressed all its support to the Government.

Mina Mirador shows the state of its tailings dams and denies a possible environmental disaster

Are there any ongoing projects?

There are three projects that are already advanced and could start construction: El Domo (in Bolívar), La Plata (Cotopaxi) and Loma Larga (Azuay). These three have already completed those exploration phases, we are talking about eight, ten years, they have already completed their feasibility phases, a couple of years there and they would be ready to start building mines, as long as there are ecological ones. licenses.

Funds have already been collected for these three projects, we are talking about 1,000 million dollars, which could come not in two or three years, but in this month, when there are environmental permits.

What is required for these environmental permits?

A consultation procedure on environmental protection is required, until before 2021 the law established that every production activity that requires an environmental protection permit must create environmental protection records, based on the judgment from 2021. The Constitutional Court (CC) determined that for permit necessary consulting on environmental protection.

This environmental consultation was already carried out by Decree 754 (Guillermo Lasso), that decree was challenged by social and indigenous movements, which represented an action of protection. The Constitutional Court at the time even suspended the ongoing processes, but the truth is that there was a judgment and it clearly establishes that there must be a law on environmental consultation, but that until there is a law, the processes will not be suspended, but will continue in the light Regulation 754 and certain standards introduced by the CC, that is, there is a way to proceed with the environmental consultation and to move forward to obtain that environmental permit and to proceed with these constructions.

Mining companies among the companies with the highest net profit in 2022, the sector looks at the results with optimism, although there are also reservations

What are the projections for 2024?

We expect that in 2024, exports from these two large mines will remain at around USD 3 billion. I think it will stay at the same level, because these two mines are reaching the maximum level of production. Ecuador has a lot of potential to double, triple, quadruple these numbers because we already have several research projects. We hope that by this year these three projects (El Domo, La Plata and Loma Larga) will receive an environmental permit so that they can start construction and attract those 1000 million dollars of investment. Those three projects would generate around 7,000 direct and indirect jobs.

Mining exports to Ecuador surpassed banana and plantain exports in value in February 2023.

What other projects are underway?

A number of other projects are progressing, such as Cascabel and Cangrejos. All those who can get their environmental permits, licenses. And at some point the mining cadastre will be opened. It is a portfolio of concession areas for mining, which is the power of the state. It is a cadastre that has been closed since 2017-2018, and this clearly coincides with the fact that the cadastre is closed and that illegal mining is starting to be exploited.

What areas are being explored?

The portfolio of medium and large-scale mining projects is diverse, there are areas in Imbabura, in that province we find excellent deposits recognized throughout the world. There are also the areas of Azuay, El Oro, Loja, Bolívar and Cotopaxi.

Does Ecuador have much to achieve with geological resources?

Ecuador is a country that, through responsible exploration and exploitation, could emerge from underdevelopment, generate a more prosperous society and reduce social gaps. The energy transition depends on minerals, an electric car consumes four to eight times more copper than a fossil fuel car; A wind antenna requires at least four tons of copper, that is, Ecuador could be an absolutely important player in the supply of these minerals that are much needed for the future.

The question is how and in what way do we want to get to these resources, do we want to do it in a controlled, traceable, enforceable, transparent way or do we want illegal mining to take it all away, that should be a question that the government and Ecuadorian society ask themselves.