MAC/20: Mines and Communities

Ecuador cancels hundreds of mining concessions

Published by MAC on 2008-01-25


Ecuador cancels hundreds of mining concessions

25th January 2008

With a startling - though not unforeseen - announcement made last Friday, the government of Ecuador has cancelled no less than 587 mining concessions in the country. Although the industry (as quoted by Mining Weekly) doesn't believe that the move will affect the largest multinational companies, nonetheless it estimates that some US$1 billion worth of concessions may now be in jeopardy.

Unsurprisingly, the news sent some shivers through Canadian stock markets, with the share price of Ascendant Copper - the most controversial junior miner operating in Ecuador - falling by nearly a third.

The announcement follows a similar recommendation made last year by a special commission set up in the DR Congo to investigate the terms under which contracts have been made with both foreign and domestic mining companies - though in that case, some of the world's biggest concerns were among those condemned.

It remains to be seen whether Ecuador's abrogated licences will be re-instated if the disgraced companies now come up with the environmental protection fees they are alleged not to have paid.

At the very least, the government is sending a strong message to the industry to expect further demands being made upon them, both by way of stricter environmental controls and increased royalty payments.


Ecuadorian gov't withdraws 587 mining concessions

QUITO, (Xinhua)

25th January 2008

The Ecuadorian government withdrew on Friday 587 mining concessions held by local and foreign firms, in an attempt to regulate this sector's activity, said Ecuadorian Mining and Petroleum Minister Galo Chiriboga.

The decision was taken due to the firms' overdue payment of conservation payments, triggering the withdrawal of concessions according to Ecuadorian legislation.

"The withdrawal of these concessions was decided in application of these legal norms, that total some 536,387 hectares," said Chiriboga in a press conference.

The measure affects national and foreign firms that maintain small and medium size concessions in the mining sector, which is currently in an initial phase.

With this measure, the Ecuadorian government will begin a restructuring phase by including a new legal framework and setting royalties to increase the State's participation in the mining sector.

Chiriboga warned that the Ecuadorian government can withdraw more concessions.

Editor: Yan Liang


Ecuador Cancels 587 Mining Franchises

Quito, Jan 25 (Prensa Latina) The Ecuadorian Government resolved to withdraw 587 local and foreign mining franchises because of non-payment of licenses, Minister of Oil and Mining Galo Chiriboga informed on Friday.

The law calls for expiration and withdrawal of granted permits if a business fails to pay its license, said Chiriboga, who stressed the need to regulate the sector.

This step resulted in the reversion of these franchises to the State, amounting to 1,325 acres, he noted.


Canadian mining firms 'in good standing' in Ecuador after some cancellations

By THE CANADIAN PRESS

25th January 2008

VANCOUVER - Some Canadian mining companies operating in Ecuador reassured investors Friday that they are in good standing in the country after word its government cancelled more than 500 mining concessions, alleging certain companies failed to pay an environmental protection fee.

Ascendant Copper Corporation (TSX:ACX), Dynasty Metals & Mining Inc. (TSX:DMM), Plexmar Resources Inc. (TSXV:PLE) and Aurelian Resources Inc. (TSX:ARU) all put out statements Friday saying they have paid all necessary fees.

Officials in Ecuador did not immediately specify which working mines were affected by the action.

Ecuador's energy and mines Minister Galo Chiriboga told a news conference Friday that the companies failed to pay a US$1 per hectare fee for environmental conservation by a March 31, 2007, deadline.

He said the cancelled concessions cover an area of some 536,000 hectares.

"Even though the state handed out these concessions almost for free by establishing a fee of just US$1 per hectare, not even that was fulfilled by these companies," Chiriboga said. "Others paid late ... or not at all."

Ascendant Copper said it has received no notification of annulment about its operations in Ecuador.

"According to Ascendant Copper's records, all concession payments regarding each of its projects have been made, on time, as stated by Ecuadorian law," Ascendant said.

"The company has complied with all government requests, abided by all Ecuadorian mining regulations and remains in compliance with all laws."

Ascendant said it is working with the Ecuadorian government on both its Junin and Chaucha projects in the country.

Dynasty Metals said it has made all of its payments "when due, to maintain the company's mining concessions in good standing under the current mining law."

Plexmar also said Friday all of its 24 concessions in Ecuador are "in good standing."

"For the past few months, the government of Ecuador has been reviewing all mining concessions titles. They specifically targeted concessions owners who have not made their yearly patent payments and may have their titles revoked as stated in the mining law. All patent payments on Plexmar concessions have been made," the company stated.

Aurelian Resources also said all of its payments have been made.

"We understand that concessions which are in arrears in patent payments may be revoked as outlined in the mining law. All patent payments on Aurelian concessions are up to date." -with files from The Associated Press


El mapa minero se redujo: 587 concesiones vuelven al Estado

Diario El Comercio, 26/1/2008

Redacción Negocios

El Gobierno sorprendió ayer a las mineras al anunciar la reversión de 587 concesiones mineras por no pagar patentes.

A estas se sumó la anulación de dos de las tres concesiones donde opera la canadiense Ascendant Cooper, por considerar que estas concesiones se realizaron con base en una norma inconstitucional, según el Ministerio de Petróleos.

Con ello, el mapa minero se reduce de 3 987 concesiones que actualmente se registran en la Dirección Nacional de Minas a 3 398 concesiones.

Entre las áreas revertidas también se encuentra una concesión de la empresa de cemento Lafarge (Selva Alegre), una de la minera ImGold y una de Lowel Mineral.

Según el ministro de Petróleos, Galo Chiriboga, "no es una acción contra la actividad, sino contra la mala práctica que ejercieron (las empresas) en minería". Pero este sería apenas el comienzo de una serie de acciones encaminadas a elevar el control en el sector, según Chiriboga.

"El proceso de revisión de las concesiones sigue y en los próximos días se incorporarán nuevas concesiones que serán caducadas en cumplimiento a lo establecido en la Ley de Minería", advirtió.

A ello se sumará una reforma a esta legislación. De igual forma dejó entrever que la Asamblea pudiera ampliar esta decisión. De hecho, el organismo estaría analizando una resolución para revisar el total de concesiones mineras.

Los concesionarios de las 587 áreas mineras, que serán revertidas al Estado, no cancelaron el valor de la patente de conservación o la realizaron a destiempo. Este costo va, entre USD 1 y USD 16 por hectárea por año. Según el subsecretario de Minas, José Serrano, el art. 26 de la Ley de Minería señala que la causa de extinción de la concesión minera es la falta de pago de patentes de conservación o producción.

"Es inconcebible que los titulares de estas concesiones ni siquiera ese dólar que debían pagar por hecárea lo hicieran a tiempo", agregó Chiriboga.

El representante de Ascendant Cooper, Francisco Veintimilla, compañía que opera en la zona de Íntag en medio de conflictos con los pobladores del sector que se oponen a la minera, prefirió no pronunciarse sobre el tema. De manera extraoficial, se conoció que hasta las 17:00 de ayer el Ministerio no notificaba a la firma.

Otros detalles

El valor de las patentes, según la normativa actual, fluctúa entre USD 1 y 16 por hectárea.

"Nada de esto es verdad. El Gobierno se ha precipitado en esto", dijo John Haigh, un portavoz de Ascendant Cooper a la agencia Reuters.

El portavoz agregó que los grupos ambientalistas del país habrían ejercido presión sobre el Gobierno para que revoque las concesiones de la compañía.

 

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