Ecuador seeks mining investment with incentives and tax benefits
Ecuador hopes that incentives and tax benefits that were passed in October will help attract mining investment.
Reuters reported that a senior minister said the nation hopes to attract $5 billion worth of investment in the next five years.
The hope is to attract foreign mining companies to help develop its gold and copper riches. They include 30-year investment contracts that promise tax stability, and accelerated depreciation.
“We have made the decision that mining constitutes a central axis of our development plans,” Rafael Poveda, Minister of Strategic Sectors, which includes Ecuador’s mining ministry told Reuters.
“We want mining to constitute the axis which will allow us to improve living conditions for communities and 15 million Ecuadorians,” he said at Toronto's Prospectors and Developers Association of Canada conference.
The country sponsored “Ecuadorian Day” at this year's show, which included a speech by the minister of mining and project presentations. It was designed to overcome troubles that began when Kinross Gold pulled out of the Fruta del Norte gold project in 2013. Kinross said it left the largest gold project in the country because the government refuse to compromise on a 70 percent tax.
When Kinross sold the high-grade venture last October, to a company belonging to the well-regarded Lundin family, the deal sparked some optimism even though the $240 million price tag was a fraction of the $1.2 billion Kinross paid in 2008.
“I went down and met them (the government) before I did the deal. I got a very strong feeling that they are committed to getting the mining sector going finally,” Lundin Gold Chairman Lukas Lundin said in an interview.