Thu May 26, 2011 6:01pm EDT
* Operational contracts to be signed in July - minister
* Says Ecuador seeking more than 5 percent royalty
By Santiago Silva
QUITO, May 26 (Reuters) - Ecuador expects to obtain higherroyalties from copper, gold and silver mines to be tapped byU.S. and Canadian companies in the Andean country, NaturalResources Minister Wilson Pastor said on Thursday.
"The law requires a 5 percent (royalty) and we are going togo higher," Pastor said at a news conference.
Negotiations with Canadian companies Kinross Gold (K.TO)and Ecuacorriente and U.S.-based International Minerals(IMZ.TO) are advancing well and they should sign operatingcontracts in July, Pastor said, not in June as he had statedearlier. Two other deals with Iamgold and Ecuacorriente shouldbe completed next year. [ID:nN2937519]
The government expects $7 billion in mining investmentsover the next seven years from the world-class mining projectsin southern Ecuador.
Ecuador, an OPEC oil-producing country, has a nascentmining industry, but it halted industrial mining activity inApril 2008 to enact a new mining law and ensure more revenuesfor state coffers.
Kinross plans to develop Ecuador's largest gold project,Fruta del Norte, with proven and probable mineral reservesestimated at 6.8 million ounces of gold, and 9.1 million ouncesof silver, the company's website says.
Kinross says Fruta del Norte is expected to produce anaverage of 410,000 gold equivalent ounces annually over thelife of the mine. It plans to start production in late 2014.
Ecuacorriente plans to develop the Mirador copper mine, which it sayshas estimated reserves of 11 billion lbs of copper. Ecuacorriente is anaffiliate of Canada's Corriente Resources, which in turn belongs toCRCC-Tongguan, controlled by China's Tongling Nonferrous Metals Group (000630.SZ) and China Railway Construction (601186.SS).
Canada's Iamgold operates the Quimsacocha gold mine and IMCis developing the Rio Blanco project.