Quito judge rejects Codelco protection request for exploration concessions

An Ecuadoran judge rejected a legal protective action filed by a local subsidiary of Chilean state-owned miner Codelco aimed at overturning the award of exploration areas Ecuadoran state mining company Enami EP made to a subsidiary of Australian firm Hancock. 

The decision to reject the request for protection, filed by Exploraciones Mineras Andinas (Emsa), Codelco's local exploration unit, was made last week by judge Melanie López Vargas.

See the full text of the ruling in the Documents box in the top-right corner.

Emsa alleged in its suit that the Enami EP had infringed its right to equality and non-discrimination when, last April, it awarded Hanrine, a subsidiary of Hancock, an area of 28,276ha in Imbabura province for exploration in six concessions, and denied the firm the option to participate in the process due to its legal dispute with the State.

The concessions are located near the Llurimagua copper and molybdenum project owned by Enami, in which Codelco would have a 49% stake once the joint venture is formed, according to preliminary agreements between the two companies.

In her ruling, López stated that there has been no violation of constitutional rights and said the protective action requested by Emsa was “inadmissible.”

Codelco started arbitration before the International Centre for Settlement of Investment Disputes (ICSID) over the lack of progress on the formation of the joint company for the development of Llurimagua.

Andrés Ycaza, a mining lawyer, told BNamericas that the Chilean company can appeal the ruling, first in the provincial court and then, if necessary, in Ecuador's constitutional court.

“That process, however, could take at least a year until there is a final decision,” Ycaza said.