CHANCE is a fine thing
Lucky Minerals Inc., listed on the Toronto Stock Exchange, sees huge potential for mining in Ecuador.
How does Lucky Minerals’ operation in the Fortuna Project fit into Ecuador’s mining awakening?
Lucky Minerals has a 550-sqkm project called Fortuna in Ecuador located in the south of Azuay, Morona Santiago and Zamora Chinchipe provinces. It is a project of 12 contiguous mining concessions awarded at the end of 2016. Lucky Minerals is a company with a great track record in the mining sector and is listed on the Toronto Stock Exchange. We see huge potential in Ecuador to develop its mining industry. The geology of the country is attractive, and most of it is yet to be explored. Our Fortuna project was born out of historical information that is being reinterpreted. It is still at an early stage, though we have found areas with certain geological anomalies that indicate we are likely to find copper.
What are your thoughts on the government’s efforts to attract foreign investment into the mining sector?
The biggest attractiveness of the country its geological potential; only 7.5% of it has been explored for mining purposes. However, this has to be coupled with a favorable administrative and legal environment. The steps the government has taken to attract FDI has been extremely important for the mining industry. However, there is still a great deal to do to turn Ecuador into a dynamic mining market at the level of neighboring countries such as Colombia, Peru, or Chile. A fundamental step was the concession of 275 areas between 2016 and 2017 for new companies to enter the market. This led international players in the industry to come to Ecuador to bet on a promising business hand-in-hand with the government. The so-called “Mandato Minero” was a moratorium on mining projects started in 2008, which was waived in 2016. Since then, mining has been one of the leading contributors to the FDI puzzle in Ecuador.
What impact does the mining sector have on the country’s economy and its society?
Thus far, large-scale mining has not truly kicked off in Ecuador, and the small scale mining sector already accounts for 1.6% of the country’s GDP. With two major projects underway, Fruta del Norte and Mirador, this percentage is expected to increase to 4%. Both started in 2019, so we have yet to see the impact on the macroeconomic level. President Lenín Moreno recently stated 2018 was when the country received its largest FDI inflow the dollarization of the economy since 1999, and the mining sector represented 53% of all the FDI that the country received over that year, surpassing the oil sector, which has traditionally been key to Ecuador’s growth.
As the sector becomes more prominent, what steps are being taken to guarantee responsible practices?
The sector started the Alliance for Responsible Mining (AMRE), which some large companies and the Chamber of Mining participate in. The purpose of this entity is to promote responsibility in areas such as rule of law, respect for the environment and communities, safety for employees, and the overall contribution of the mining sector to the growth of Ecuador; however, the lack of knowledge that Ecuadorians have in the mining sector is a challenge that has to be addressed. The country has traditionally had a small mining sector that did not follow international standards, including a certain degree of illegal mining. These factors have resulted in people thinking mining activity is harmful to the environment. We want to show that it is possible to do mining while being responsible to the environment and responding quickly if there are any issues that need to be addressed. ✖