Ecuador scraps mining rail plans

Building a mining rail line in Ecuador is increasingly unlikely, even though several projects are slated to start production through 2030.

"The [mining train] is on standby for the moment. It is likely that the country will consider it again when there are already several new mines exporting, as that will help improve competitiveness and reduce costs," the head of the country’s PPP department, Roberto Salas, told BNamericas.

With support from the IDB, Ecuador hired a consultancy last year, which determined that northern and southern mining rail corridors would require US$2bn, Salas said. 

But production and construction at several projects will start at different times and the State does not have the resources to finance the corridors, Salas said.

He added that talks with miners revealed that overall production would not yet justify the outlay for the rail.

In a recent interview with BNamericas, energy and mines minister Fernando Santos said SolGold, which operates the US$3bn Cascabel copper-gold project, plans to build a pipeline to transport material to Esmeraldas port.

Salas said the Australian company told the consultants that this mineral pipeline would constitute an alternative to the rail since it would be more cost competitive and efficient. Representatives of other miners with projects that are about to start production said the same, according to Salas.

He added that Ecuacorriente, which operates the Mirador copper mine, and Lundin Gold, which operates the Fruta del Norte asset, are not interested in the mining train either, "at least for the moment" because they use truck transport, which provides jobs for nearby communities.

Mirador and Fruta del Norte are Ecuador’s only producing assets, but seven projects should start production in the coming years.