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VARIOUS MINING PROJECTS ARE COMING ONSTREAM IN ECUADOR IN THE COMING YEARS WHOSE EXPORT PROSPECTS ARE PROMISING.

Various mining projects are coming onstream in Ecuador in the coming years whose export prospects are promising

ECUADOR HAS HAD METAL MINING, chiefly gold, since the times of the Incas. What attracted Spanish conquerors to what is now Ecuador was its celebrated gold mines in both the eastern and western ranges of its patch of the Andes. Indeed, Aurania is presently prospecting the Andes for the lost cities of gold of the early Spanish conquest. Gold and silver mining continue to this day in the region, in the aptly named El Oro province. However, Ecuador did not see any production from world-class mines until late November 2018, when Ecuacorriente (ECSA) started exporting copper from its Mirador 1 field.

This is the first of the so-called strategic projects to go onstream. These are the five large commercial deposits discovered before all industrial mining activities were ordered to stop a decade ago: Mirador 1 and Norte, Panantza-San Carlos, Fruta del Norte, Rio Blanco, and Loma Larga.

Ecuacorriente is owned by two Chinese stateowned companies: Tongling Nonferrous Metals Group Holding Co. Ltd. and China Railway Construction Corporation Limited.

ECSA has several properties in the Condor range, in the southeastern Andes, including Mirador 1 and Mirador Norte in Zamora and PanantzaSan Carlos in Morona. The site currently entering exploitation is Mirador 1.

ECSA invested USD1.248 billion in the prospection and exploration of the Mirador project in addition to the development of Mirador 1; up next is Mirador Norte. The latest estimate is that probable reserves at Mirador 1 are 3.18 million MT of copper, 3.39 million oz of gold, and 27.11 million oz of silver. Exports are expected to total USD20 billion over a 30-year span.

The plant started processing 10,000MT/day and will produce 400MT/day of a fine pulverized rock that contains 12MT of copper. These 400MT/day are packed in 2MT bags, which are loaded into trucks in groups of 12—that is 33 trucks a day— and taken to Guayaquil for shipment to China to be refined. Within a year, output is expected to grow six-fold. On October 9, the Ministry of Environment approved the extension of the exploitation of the Mirador 1 mining project from 30,000MT/day to 60,000MT/d.

Advanced exploration should start soon at Mirador Norte, with a view to bringing it onstream in 2026 at the latest. If both Mirador Norte and Panantza-San Carlos are brought onstream, figures for both exports and government take from the ECSA operation would more than quadruple.

In mid-December, exports will start from Lundin Gold’s Fruta del Norte property, also in the Condor range. Lundin Gold describes it as “a large, high-grade gold deposit with probable reserves of 5.02 million ounces.” It also has probable gold exports of 310,000oz of gold per year. Newcrest holds 27% of Lundin Gold’s stock. Lundin has invested USD692 million and will exploit the mine over 15 years at a clip of 3,500MT/day, yielding 310,000 oz/year, a market value of USD456 million/year at today’s prices. Lundin has other prospects in the Condor range.

For 2020, the authorities expect exports worth USD452 million from Mirador and USD439 million from Fruta del Norte. Petty mining operations would add up to USD290 million, for a total of USD1.2 billion. Mirador’s exports are expected to increase substantially in the next two years.

The authorities expect exports from a gold mine in Azuay province, Río Blanco, to start in 2020. It is operated by a subsidiary of the Chinese company Junefield. Rio Blanco was expected to start producing in 2018, but the site was attacked by activists and partially destroyed. Also, an Azuay court ordered operations to shut down, and activists have blocked the access road. The authorities are after a reversal of the court’s decision.

The Loma Larga gold field of INV Metals in Azuay is expected to export USD304 million in gold a year starting from 2021. The feasibility study contemplates an underground mine with an initial daily production rate of 3,000MT/day, up to 3,400MT/day in the fifth year, resulting in an average annual gold recovered production of 206,000oz over an initial projected life of approximately 12 years.

With all these projects coming on stream, the authorities expect Ecuador’s mining exports to reach USD2 billion by 2022. ✖