Ecuador Wants Mining Exploration to Restart by AugEcuador Wants Mining Exploration to Restart by August (Update2)
By Stephan Kueffner and Stewart Bailey
May 9 (Bloomberg) -- Ecuador's government wants exploration of large-scale gold and copper deposits to restart by late August after suspending such activity last month, Mining Undersecretary Jose Serrano said in an interview.
Mining companies with operations in Ecuador rose on the comments, with Dynasty Metals & Mining Inc. climbing 5.9 percent from intraday lows and Aurelian Resources Inc. jumping as much as 6.5 percent after the remarks.
Ecuador's Energy and Mines Ministry is drafting a new law to eliminate what President Rafael Correa has said was widespread corruption and regulatory problems in the industry. On April 18, mining and exploration was suspended in the country while the new law was drafted.
``This is an indication that the government is working toward getting the mining law in place and getting the companies back to work,'' Wendell Zerb, mining analyst at Cannacord Adams, said Toronto. ``The timeframe is one of the key things.''
The Energy and Mines Ministry wants to keep the suspension of mining projects as short as possible, Serrano said at the ministry's offices in Quito.
``Once the law is in force, they will be able to start working immediately -- we expect in August by the latest,'' Serrano said. That will allow mining of metals like gold, copper, and molybdenum to start by the end of next year, he added.
Correa has said Ecuador holds about $220 billion in reserves in metals and other minerals. He sought the moratorium on mid- and large-scale mining projects because of what he called corruption and speculation among the more than 5,000 concessions, most of which are being revoked.
Mining Talks
Discussions with mining companies in Ecuador will resume on May 12 and focus on letting the companies continue with work, Serrano said. Many companies are still working on their projects because they have yet to be formally notified of the ban, he said.
``In reality, we can't say that everything is paralyzed,'' Serrano said.
Aurelian, based in Toronto, gained 1 cent to C$4.78 at 3:59 p.m. in Toronto Stock Exchange trading, after earlier having declined as much as 8.8 percent.
Dynasty, based in Vancouver, fell 5 cents to C$3.01, after having declined as much as 4.9 percent. The shares have declined 56 percent this year.
To contact the reporter on this story: Stephan Kueffner in Quito at skueffner@bloomberg.net; Stewart Bailey in New York at sbailey7@bloomberg.net.