Ecuador's president is making assurances that he supports large-scale mining, even after his government passed a highly controversial mandate that halts all activity for as long as six months and revokes most concessions.
After the suspension was voted on and approved on Friday, President Rafael Correa spoke with representatives from foreign mining companies. He told them that rather than end all future mining activity, the government wants to cancel concessions "that are in a bad state," and to get a minerals law firmed up before any more work takes place.
According to the mandate, that law needs to be in place in the next 180 days.
"The current dilemma is not to say yes or no to mining, but rather to seek for responsible, economical, social and environmental mining," Mr. Correa said in a brief statement.
However, last week's sudden and totally unexpected suspension has cast a black cloud over Ecuador, which was considered one of the world's most promising undeveloped mining jurisdictions.
"[Mr. Correa] says he hasn't changed his stance, but his support of this policy has shaken investor confidence in this country, without a doubt," said Patrick Anderson, chief executive of Aurelian Resources Inc.
Shares of Aurelian and fellow Ecuador miners Corriente Resources Inc. and Dynasty Metals & Mining Inc. went into a freefall starting Thursday when reports of the suspension started to emerge.
Industry experts who have followed the government's situation believe the mandate is the result of high-level political dealmaking involving Mr. Correa and Alberto Acosta, who leads Ecuador's constitutional assembly and opposes large-scale, open-pit mining. But how the government reached the decision is unknown, as are the implications.
For now, Aurelian is planning to make the suspension "as harmonious" as possible, and will maintain a presence in the communities where it operates.
"There's going to be a lot of layoffs in the short-term and a lot of very unhappy people," Mr. Anderson said.
"There's going to be people who had no work before, who are going back to no work and no form of income."
pkoven@nationalpost.com