Ecuador Mining Min Chiriboga Says Preparing New MiDJ Ecuador Mining Min Chiriboga Says Preparing New Mining Law
Monday, April 21, 2008; Posted: 10:17 AM 7 Stocks You Need To Know For Tomorrow -- Free Newsletter
QUITO, Apr 21, 2008 (Dow Jones Commodities News via Comtex) -- -- Mining and Oil Minister Galo Chiriboga said Monday in an interview that he hopes to have a proposal for a new mining law ready by May.
That new law will be written to take into account the new constitution that Ecuador's Constituent Assembly is currently writing.
"We have a draft proposal that has been discussed by all sectors involved: communities, private mining companies and environmentalists. We are aiming to arrive at a consensus," Chiriboga told Dow Jones Newswires on Monday.
Last Friday, the Constituent Assembly, which is acting as the nation's legislature, passed a decree which froze mining sector activity by revoking around 80% of the mining concessions and by suspending the other 20% for 180 days.
One of the keys aspects of the new law will be royalties for the state and for communities where the mining projects are developed, according to Chiriboga.
The project will be sent to President Rafael Correa at the end of May. Correa will make the final decision.
Chiriboga plans to call for bids for the concessions which were revoked by the Assembly.
On Friday the assembly also decided that each private-sector mining company will be allowed to have only three concessions. Chiriboga said the private companies affected will decide which concessions they will maintain.
Correa, a left-leaning economist, took office last year and has steadily moved the government toward taking greater control of natural resources.
"In our view, the government's changes to the existing legal framework and to the mining concession contracts is further deteriorating the business environment in Ecuador, which might result in lower investment and GDP growth in the medium term," Credit Suisse said in a report Monday.
"However, in the near term, these changes to the mining framework may result in higher revenues for the government," the investment bank added.
Ecuador currently has wide areas under exploration but few actual operating mines.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com
(END) Dow Jones Newswires