Jorge Barreno Cascante, General Manager, INV Minerales Ecuador

INV is changing the image of the mining sector in Ecuador by providing knowledge about the ecological consequences of mining and showing the benefits of responsible mining.

• Interview

Why did the company decided to invest in the Loma Larga project?

INV entered Ecuador to take over IAMGOLD’s Loma Larga project. IAMGOLD was willing to transfer the project to another firm under two conditions. First, the new company had to be acquired by a Canada-based firm with the same environmental and community programs. Second, all their engineers and workers would keep their jobs under the new structure. Ultimately, we were selected to carry on with the project, starting from 2013 and then onward; however, IAMGOLD still has a 35% stake in the project. INV conducted additional exploratory work and executed pre-feasibility and feasibility reports. These steps demonstrate the commitment of INV to develop the Loma Larga project. We are nearing the permit-granting phase and will start to develop the project in the near future. The feasibility study contemplates an underground mine of gold with a daily production of approximately 3,000 tons per day (tpd) in the initial years. We expect to reach 3,400tpd by the fifth year. This will result in more gold recovered. We anticipate recovering 206,000oz over the projected life of mine, which is about 12 years.

What next steps should Ecuador take to encourage modern industrial mining?

The development of the mining sector is key for Ecuador’s economy. The country has suffered in the past from bad practices in small mining projects. These projects did not generate revenue for Ecuador, and also triggered turmoil and certain degree of social unrest. That past has made it challenging to attract modern industrial mining companies into the country; however, projects such as Fruta del Norte are showing that different mining styles are available, and that responsible mining can happen in the country.

How is INV working to act as a responsible operator in the sector and promote the positive side of mining?

In Ecuador, people think that we must choose between mining or water resources, or between mining and biodiversity. In order to tackle this misconception, we started working in partnership with universities to monitor these environmental factors. This work is not just for the company’s interests. By encouraging the publication of academic papers and research on these mining issues, important knowledge about the ecological consequences of mining will become available to all stakeholders. We monitor the water quality every three months, and we evaluate biodiversity every six months. As for the communities, we have an entrepreneurship program for women that focus on developing natural medicinal products, as well as traditional foods such as jam. In all, we have generated 40 entrepreneurial initiatives thanks to our Loma Larga project. Another area we are looking at is food security. We want to ensure that communities continue working on traditional foods. At the same time, we want to ensure access to staple items is guaranteed.

What’s your view on the support that the government provides to mining activities?

We have seen a welcome change in the mindset of government officials, who have realized that mining is a magnet for FDI. Our sector has the potential to bring huge resources to the country. Mining generates about USD2.4 billion per year in exports. About half of that, USD1.2 billion, comes from production costs. Mining can boost the local economy and generate revenues for the government. In 2018, more than half the FDI that Ecuador received came from the mining sector. That was an annual record for Ecuador. The social stability that this government wants to foster helps put investors at ease. For all of this to take place, however, we need to see consistent policies from the government.

What role will INV play in Ecuador in the long run?

We believe in Ecuador. We have the structure, the geological opportunities, and the government support to develop this industry. The country’s future requires a long-term vision in which mining can play a vital role. In short, people need to realize that mining can have the same effect as oil and gas. ✖

Loma Larga gold project expected to reach tons per day

IAMGOLD owns of the Loma Larga project

Jorge Barreno Cascante GENERAL MANAGER, INV MINERALES ECUADOR