MAC: Mines and Communities

Legal victories in Ecuador

Published by MAC on 2020-09-28
Source: Reuters,, DECOIN, Green Left

The highest court ruled in favor of holding a referendum on large scale mining

Two relevant judicial decisions were issued last week in the Andean country.

In the first, the highest court said it had ruled in favor of holding a referendum on banning large and medium-scale mining activity near water sources in Cuenca, a city in southern Ecuador’s highlands. Participation in the referendum on mining will be mandatory, according to city authorities. Link to full text in Spanish:

In the second, a judge at the Cotacachi Court ruled that the Ministry of the Environment failed at its job of protecting rare animal species on the Llurimagua mining concession in northwestern Ecuador’s biodiverse cloud forests. The Constitutional Injunction (Medidas Cautelares) was brought to the Cotacachi court in late August to stop the Llurimagua copper mining project. The case argued that extractive activities should be prohibited in all habitats where endemic species are found.

See also on MAC:

2019-08-02 Azuay province asks court for mining referendum

2015-07-15 Community plebiscite to stop mining in Kimsacocha

Ecuador's Constitutional Court approves consultation on mining in Andean city


Sept 21 2020

Ecuador’s highest court said Monday it had ruled in favor of holding a referendum on banning large and medium-scale mining activity near water sources in Cuenca, a city in southern Ecuador’s highlands.

Cuenca’s city government had proposed that the Constitutional Court approve questions for the referendum, which seeks to prohibit mining and pollution in areas surrounding five rivers that cross the city and are its source of water.

The Constitutional Court ruled in favor of five questions, but clarified that its decision was not retroactive. Cuenca is already home to key mining projects, such as Loma Larga operated by Canadian INV Metals Inc.

“It has been a dream for Cuencans for so many years to be allowed, through popular consultation, to determine the future protection of our water sources,” Cuenca Mayor Pedro Palacios told reporters.

Participation in the referendum on mining will be mandatory, according to city authorities.

Ecuador, an oil-producing country facing a liquidity crisis, is seeking to develop its mining industry to diversify its economy and sources of income as it struggles to pay off its foreign debt.

The Constitutional Court, citing technical errors in the questionnaires, had previously denied three requests seeking a ban on mining activity in all of Azuay Province, where Cuenca is located.

The Energy Ministry, which oversees mining activity, did not immediately comment on the court ruling.

But a representative of a mining industry group said the ruling would harm Ecaudor’s ability to attract investment to its mining sector.

“The main effect is the hit to Ecuador’s international credibility and the financing of exploration activities,” said Andres Ycaza, a lawyer for the Ecuadorian Chamber of Mining.

Ecuador projects mining exports will reach about $642 million this year in the “most pessimistic” scenario. (Reporting by Alexandra Valencia; Writing by Sarah Kinosian; Editing by Tom Brown)

Communities to decide Ecuador mining projects’ fate

Cecilia Jamasmie

September 22, 2020

Ecuador’s highest court has ruled that communities have the right to hold referendums on whether or not proposed large and medium-scale mines can move forward, but said the public can only vote on mining rights not yet granted and not on licensed projects.

The constitutional court’s decision follows a petition by the government of Cuenca, a city in the country’s highlands, to propose questions to a referendum seeking to ban mining near water sources.

It represents a victory for Cuenca, in the southern province of Azuay, which hosts several projects, including SolGold’s (LON, TSX:SOLG) Sharug project and Canada’s INV Metals’ (TSX-V: INV) Loma Larga gold-silver-copper project.

“It has been a dream for Cuencans for so many years to be allowed, through popular consultation, to determine the future protection of our water sources,” Cuenca Mayor Pedro Palacios told local media.

Participation in the referendum on mining will be mandatory, Palacios added.
Current projects safe

INV welcomed the ruling, saying it solidifies its lawful rights. The company noted it was currently working with the government to review Loma Larga’s environmental impact study to advance it through the permit process.

Processing ore from underground mines will be done without using cyanide, IVN has said, an about 55% of the tailings will be placed underground using the paste backfill method.

The remaining tailings, the project developer noted, will be filtered and pressed to remove water to be treated and recycled within the processing facilities.

Ecuador has gained ground as a mining investment destination over the past two years, but opposition to the extraction of the country’s resources could thwart the government’s plan to attract $3.7 billion in mining investments over the next two years, up significantly from the $270 million it received in 2018.

Major legal victory for endemic species in Ecuador and the Rights of Nature

Carlos Zorrilla

September 25, 2020

“In a huge win for the environment, on Thursday 24 September a judge at the Cotacachi Court ruled that the Ministry of the Environment failed at its job of protecting species on the Llurimagua mining concession in northwestern Ecuador’s biodiverse cloud forests. The case has implications for mining companies operating throughout Ecuador,” says Rebekah Hayden, a member of the Rainforest Action Group, an environmental research and advocacy group.

The Constitutional Injunction (Medidas Cautelares) was brought to the Cotacachi court in late August to immediately stop the Llurimagua copper mining project. The case argued that extractive activities in all habitats where endemic species are found should be prohibited.

“Two endemic species of frogs are threatened by the Llurimagua mining project: the Longnose Harlequin Frog and the Confusing Rocket Frog. The case was presented by environmental and community groups DECOIN, GARN, CEDENMA and the Jambatu Centre.  More than three dozen other species including, several bird species, two species of monkeys and the spectacled bear are also in danger of extinction from the mining project,” says Carlos Zorrilla, a founder of DECOIN.

The team presented  several  expert testimonies,  including Ecuador’s best-known herpetologist Juan Manuel Guayasamin and Amicus Curiae (Friends of the Court) from mammal biologist Professor Diego Tirira, University of Sussex biologist Mika Peck, and lawyers from the country’s Ombudsman’s office, in addition to Nature Rights expert Natalia Greene, among others

“The Llurimagua copper mining project is being jointly developed by Ecuadorian state miner ENAMI and Chile giant Codelco in an extraordinarily biodiverse region. However, community resistance, a highly flawed environmental impact study and conflict between the two companies over how to split the profits, means there hasn’t been any exploration on the site since 2018. Aussie companies BHP and Hanrine (a subsidiary of Gina Rinehart’s Hancock Prospecting) are contenders to buy ENAMI’s share, with the sale expected to happen in the next few months,” says Rebekah Hayden.

The court ruled in favor of the Rights of Nature over the economic rights of the mining companies, giving the respondents – the Ministry of Environment and the Attorney General – three months to remedy the illegalities and irregularities detected in the first stage of exploration. This process will be overseen by a number of civil society groups, including universities.

“The judge ruled that if the government can’t show they can adequately protect these species from extinction, the mining permits will be revoked. One of the interpretations of the ruling indicates that similar cases to protect other endemic species around Ecuador may succeed in the courts. Given Ecuador’s high rate of endemism, it could stop a large part of the country from being mined,” says Carlos Zorrilla.

The government has said it will appeal the decision, but the Rights of Nature team are confident they are more likely to win at a higher court.

“We are prepared to take the case all the way to the Supreme Court, as we feel there is indisputable evidence that mining in Intag’s forests will violate the Rights of Nature,” Carlos Zorrilla says.

The prospect of a lengthy court case, particularly when Rights of Nature are such an important part of the Ecuadorian Constitution, may affect not only BHP and Hanrine’s decision to invest in the project, but will have far reaching consequences for other mining projects in the country.

The Imbabura Province where Llurimagua is situated has been a hotbed of conflict since the early 1990s, with two mining companies forced out since then.

With the ruling, communities who have confronted several mining companies and aggressive government tactics to impose the mining project since 1995, are breathing a sigh of relief. In the meantime, the ruling sets a new precedent strengthening the Rights of Nature  in the country. A development extractive companies can no longer ignore.

Australian mining companies plunder Ecuador's gold and copper

Anthony Amis

August 28, 2020

In 2008, Ecuador was the first country in the world to enshrine the rights of nature in its constitution. But international mining companies have been given the green light to exploit the country’s copper and gold reserves.

The Ecuadorian government is desperate for foreign capital injections to ease its weakening economy, caused in part by falling oil prices.

The small South American country has become a magnet over the past four years for mainly Australian and Canadian mining companies wanting to cash in on the desperation and mine its untapped mineral resources.

Mining companies have arrived in Ecuador, largely after its copper and gold reserves. “Copper is the new iron ore”, according to one Australian mining executive. Companies are already designing their marketing strategies around the need to mine copper to supply the world’s renewable energy sector.

For most of Ecuador’s history there has been small-scale gold mining. The country has not been exposed to the large-scale mines that have been pushed forward in neighbouring countries, such as Chile, since the 1970s, or Peru in the 1990s. This situation is rapidly changing.

In 2009, the government of Rafael Correa (who was president from 2007-17) enacted Ecuador’s Mining Law and in 2010 created the national mining company ENAMI. The new law however, was seen as a major disincentive to multinational companies, because of a constitutional mandate that suspended the granting of new mining concessions and the expiration of several existing concessions. It was also unpopular due to a windfall tariff of 70% on the difference between the sale price and baseline pricing.

Indigenous opposition

Indigenous groups also opposed the law and mining in general, particularly in the Amazon basin, and big protests occurred in 2007 and 2009. Mass protests by the Confederation of Indigenous Nationalities of Ecuador (CONAIE) also occurred in 2012, culminating in a march to the capital, Quito, in March 2013.

The decision to auction off 3 million hectares of the Amazonian rainforest in the Yasuni Nature Reserve to Chinese oil companies in 2013 further raised the ire of indigenous groups. Ecuador, at the time, had a US$7 billion debt to the Chinese Government.

Some refinements to the Mining Law occurred in 2012 and in 2015 the Correa government created new mining investor-friendly taxes and government incentives and policies to further attract mining. These included the creation of the Mining Ministry (now the Energy and Non-Renewable Natural Resources Ministry).

By March 2016, guidelines for granting metallic mining concessions across the country were created. Local communities and, in particular, indigenous communities, were kept in the dark as to these developments.

Moreno's mining boom

In May 2017, Lenin Moreno came to power and in 2018 the 70% windfall tariff was lifted by his government. Moreno went cap in hand to the International Monetary Fund for a US$10bn package of loans, which meant cuts in government spending. Mining was seen as a means of generating revenue and was expected to bring in US$715 million of taxes for the government by 2021.

Many conservationists first became alerted to the mining company “invasion” in 2017 when volunteers at the 5000ha Los Cedros Reserve, located in the northwest of the country noticed forest disturbances on the edge of the reserve, which they attributed to illegal miners.

Los Cedros was created in the late 1980s through a grant from the Australian Government’s AusAID program and contains some of the most biodiverse forest on the planet. It has been fiercely protected since that time, with 1200 scientists from around the world supporting its long term protection from mining.

After conducting further research, campaigners soon realised that 68% of Los Cedros had been under a mining concession for several months to Canadian mining company Cornerstone Capital Resources.

More investigations followed and the alarming discovery was made that the concession over Los Cedros was only the tip of the iceberg. A third of the entire country of Ecuador (7.17 million ha) had been opened up to mining concessions, with a massive amount of concessions on protected forests and indigenous lands.

Australian mining interests

Melbourne Rainforest Action Group formed in 2018 to research which Australian mining companies were investing, exploring and ultimately mining in Ecuador.

The company with the largest number of concessions (more than 70) is little-known Brisbane-based exploration company Solgold.

Solgold had been exploring in Ecuador since 2011, so had the edge on other companies by establishing a foothold in the country. Their prized asset was a concession located in the north of the country called Cascabel, which had initially been “owned” by Cornerstone, which kept a 15% interest in the concession.

Solgold CEO Nick Mather was involved with Waratah Coal, one the first companies to propose mining in Queensland’s Galilee Basin. Waratah was snapped up by Clive Palmer in 2008 and Mather went on to help develop the coal seam gas industry in Queensland.

Australian miners BHP and Newcrest Mining also have an interest in Solgold, each owning 14% of the company.

BHP also has further mining concessions in north-western Ecuador, very close to Los Cedros. Their exploration was resisted by local communities in the Intag Valley and BHP raised the ire of many after their exploration activities badly polluted the Manduriaca River.

Melbourne-based Newcrest Mining’s main interest is in the south-east of the country, in the headwaters of the Amazon. Production began this year at a massive underground mine, Fruta Del Norte, which Newcrest has a 32% stake in. The company developing the mine was the Swedish firm, Lundin Mining.

Forty kilometres north of Fruta del Norte, production has also just started at the huge Mirador mine, owned by Chinese firms China Railway Construction Company (CRCC) and Tongling Nonferrous. This mine, also in the headwaters of the Amazon, plans to have the world’s tallest tailings dam, three times higher than any other.

In light of the disastrous tailings dams collapses in Brazil over the past few years, there are very real concerns that a similar dam collapse at Mirador could destroy thousands of kilometres of waterways in the Amazon.

Further investigations found that Australian mining magnates Gina Rinehart and Andrew “Twiggy” Forrest were also active in Ecuador. Rinehart’s company, a subsidiary of Hancock Prospecting, Hanrine, owns several concessions just south of Cascabel and Forrest’s company Fortescue Metals Group (FMG) owns a swath of concessions throughout the central and southern areas of the country.

FMG’s concession ownership in Ecuador (about 70) is second only to Solgold, as far as Australian companies go, although its on-ground activities have, so far, been limited. FMG has been active in Ecuador since June 2016.

Gina Rinehart

Hancock Prospecting first visited the country in September 2016. Just before concessions were granted to Hanrine in early 2018, a gold rush occurred on one of its concessions called Imba 2.

Up to 10,000 miners from a dozen countries soon flooded into the concession near the small community of Buenos Aires. The gold rush was huge news in Ecuador and it soon became apparent that the illegal miners were also under the thumb of local mafia cartels.

After 18 months, and the reported murders of a number of miners by organised criminals, two thousand troops were sent in to clear out the concession in July last year. Millions of dollars of damage to the concession was reported with some saying that the “foreign” owner of the concession should be held responsible for some of the clean up and security costs.

El Comercio reported on August 26 that Hanrine's mining camp near Buenos Aires was set ablaze on August 25.

In August, the media reported that Hanrine’s general manager of operations in Ecuador, Carlos Miguel, had been arrested on arms charges.

Miguel’s security company was contracted to provide security for the Ecuadorian embassy in London, a month after WikiLeaks founder Julian Assange entered it.

There are suggestions that Miguel was arrested because of a dispute between Hanrine and the Chilean and Ecuadorian Government’s over control of a major potential mine called Llurimagua, again in the north west of the country. An offer of $400m had reportedly been made by Hanrine, which supposedly would buy out the Ecuadorian Government’s share.

Other Australian companies involved in Ecuador include Perth-based Sunstone Metals, which owns two concessions in the north and south of the country, with one directly bordering Los Cedros.

Another Perth-based company, Titan Minerals, recently took over the Canadian company Core Gold, which owns a processing plant and concessions in southern Ecuador, and Tempus Resources which owns two mining concessions in rainforest in close proximity to the Fruta Del Norte mine.

Local resistance to the mining and exploration is ongoing. Ecuador is a very volatile region. A Chinese-owned mine called Rio Blanco was shut down in 2018 after being fire bombed. Numerous communities are fighting back over loss of control of their lands, including their drinking water supplies.

Solgold has been the target of some protests and BHP is copping plenty of attention in the Intag Valley from a number of communities. Ongoing protests have also occurred in the country’s south east near the Fruta del Norte and Mirador mines, which are located on the lands of the Shuar people.

If Rinehart is successful in her pursuit of the copper resources of Llurimagua mine, she will also encounter the wrath of the Intag Valley community, which has long voiced its opposition to mining in the region.

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