Ecuador PoliticsHere is a post that I just made on another BB in relation to a question asked about the Ecuadorian political situation. Obviously it relates to ARU, as there are a number of posters here that consistently use fear tactics re the 'scary' Ecuadorian government.
I got to speak to the mangement of another Resource Junior operating in Ecuador 2 weeks ago and the conversation was very enlightening.
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I attended the Cambridge Resource Conference on the 21st/22nd of October, and had the pleasure of speaking with Cyrus Ameli, VP Corporate Affairs for Channel Resources Ltd (V.CHU - No, I don`t own it, not trying to promote it). I knew in advance that their key property was in Ecuador so I was prepared with a line of questions in regard to the current politics. Unfortunately, my notes were misplaced and I just located them today in another company folder.
Cyrus was very personable and anxious to speak about all things Ecaudor. Here is what he had to say:
-When asked about defined mining laws, he said he expected written law by next summer, but a full outline to be made public by the government by the end of December. He stated that management fully anticipated mining laws to be `brought in line with Chile and Peru`. He expected royalties to be in the area of 3-5%
-He stated that the government is anxious to bring in foreign investment. Cyrus said that community involvement was essential, and that they were undertaking a number of community initiatives, including the construction of a medical station. He said that as along as the community was involved and benefited, mining companies would face no hurdles in getting up and running. Cyrus also said that the Correa government liked the track record/reputation of the Canadian mining companies and was very pro-Canada in regards to business relationships.
I asked him about Chiraboga as compared to Acosta. He stated that Acosta`s public comments were the reason Correa had him replaced, and that Chiraboga is extremely pro-development. He said that as it was, Acosta was a single voice, and that his impression was that the Correa government AND the opposition is very pro-development. He reminded me that the opposition is right-leaning and extremely pro-business. He also speculated that Acosta just grandstanding, as he was running for a position in the congress.
Cyrus elaborated that Ecuador COULD NOT follow Venezuela re nationalization of private companies (oil or miners) – they could not afford to. Venezuela is a top oil producer with massive, developed fields that generate billions of dollars – enabling Chavez to take over the fields and use the dollars for social development. Ecuador`s petro industry is miniscule by comparison and seizure would not generate enough dollars to sustain any kind of economy/or social development. He said that there is no mining industry to seize and they need the outside investment to develop it.
He further elaborated that the Correa Government is fully aware of the mining potential of Ecuador and his mandate is to utilize foreign investment to develop world-class mines, while at the same time enriching the lives of the Ecuadorian public. He said he was very excited about their opportunities there and saw no potential obstacles as long as the local community was fully involved.
I came away very confident that the Mining climate in Ecuador is unencumbered and very pro-development.
All the best,
Permaflation