Ecuador battling new anti-mining referendum

Ecuador, which has seen several popular consultations go against mining projects in recent times, faces yet another possible referendum against the industry, as agricultural communities express concern over potential environmental impacts.

Both the Ecuadoran government and the mining industry have appealed against the proposed referendum on mining in four municipalities in Carchi and Imbabura provinces, which could affect projects such as SolGold's Cascabel (gold-copper).

The government claims that national policy concerning natural resources holds sway over local consultations. Deputy mining minister Fernando Benalcázar has also warned that a ban on large-scale mining will encourage the spread of illegal mining operations, adding the government’s recently-announced mining policy places great emphasis on environmental issues.

“They tell us that legal mining doesn't pollute,” Quito-based newspaper El Comercio cited district attorney Wilmer Meneses as saying during a constitutional court hearing. “But we've seen that it isn’t so, and the communities will disappear.”

The court is expected to give its verdict on June 24 as to whether the referendum should be held, according to SolGold.

“Representatives from a large number of government bodies, employees, regional community representatives, pro-mining groups, international mining groups and members of the community from Cascabel attended the hearing to demonstrate their strong opposition to the proposal,” the Australian firm said in a statement. “SolGold continues to receive full and objective support from the Ecuadorian government.”

The proposed referendum comes after a March plebiscite rejected mining operations in copper-rich Azuay province, potentially affecting Junefield's Río Blanco and INV Metals's Loma Larga projects.

“We're confident that the constitutional court has heard the clear arguments of the chamber and those who express that a consultation due to the interests of a group of people is unconstitutional,” Andrés Ycaza, vice president of Ecuador’s mining chamber (CME), wrote on Twitter.

Ecuador, which has been courting mining investment in recent years to diversify its economy away from its dependence on hydrocarbons, battled protests by indigenous groups in November who oppose the government’s plan to increase the number of mining concessions.

President Lenin Moreno, who took office in May 2017, seeks to drum up US$4.6bn in investment over the next four years in large-scale mining projects by companies including Junefield, Lundin Gold, EcuaCorriente, INV, SolGold, BHP and China Explorcobres.

SolGold last month published a preliminary economic assessment for Cascabel’s Alpalá deposit, showing a US$2.4-2.8bn project could average 207,000t/y copper; 438,000oz/y gold and 1.4Moz/y silver over a 25-year period.