QUITO (Reuters) - Two of Ecuador’s five mines in development are on track to start producing copper and gold in the fourth quarter of 2019 in line with plans, a senior government official said in an interview, as the country pushes to diversify its economy from oil exports.
The construction of infrastructure is already well advanced at copper mine Mirador and gold mine Fruta del Norte, Vice Minister of Mines Fernando Benalcazar told Reuters on Thursday.
Canadian miner Lundin Gold Inc owns Fruta del Norte and China copper producer Tongling Nonferrous Metals Group Co Ltd has a 70 percent stake in the Mirador copper project.
The OPEC nation, which has struggled with low oil prices in recent years, has been drumming up foreign investment to tap its big copper, gold and silver deposits. It aims to more than double the value of mining to its cash-strapped economy by 2021.
“Two of the five big strategic projects will already yield financial returns this year,” Benalcazar said. “We are no longer just a potential mining destination. Instead, Ecuador has already become an investment destination.”
The official added that he expected $860 million more in investment in those two mines throughout 2019 and 2020.
Ecuador had no mining industry to speak of until recently.
El Mirador was the first large-scale mining contract the country ever signed, in 2012, under former President Rafael Correa.
Two other mining projects have stalled due to the constitutional requirement to get approval from local communities.
Ecuagoldmining, owned by Junefield Mineral Resources Limited and Hunan Gold Corp Ltd , has suspended operations at its Rio Blanco gold-silver project after a local judge charged it with not having consulted properly with locals.
Meanwhile the Loma Larga gold project, operated by Canada’s INV Metals Inc is awaiting the results of a popular consultation later in March.
INV said last month that it would consult with authorities and discuss options for processing facilities including relocation if the referendum yields an unfavourable result.
“We respect the decision of the justice system, whether we agree or not,” said Benalcazar, adding that his government championed responsible mining.
The vice minister added that Ecuador’s state mining company Enami EP and Chile’s state miner Codelco are in the final phase of talks to define the joint venture they will create to develop the Llurimagua copper reserves in the north of Ecuador.
President Lenin Moreno, who has generally pursued more market-friendly policies than his leftist, populist predecessor Correa, has sought to attract more foreign investment with moves like abolishing a windfall tax in August.
But fierce resistance to mining in some communities can put off investors.
Reporting by Alexandra Valencia in Quito; Writing by Sarah Marsh; Editing by Lisa Shumaker