The Gold Mining Situation
Currently, in the 21st century, the gold mining extraction industry
is in a transition phase. Because of the increase of gold prices, the
industry is making high profits, and Ecuador is taking advantage of this
situation. The relevance of gold mining in the
country is demonstrated by its placement as the fourth most important
with regards to Ecuadorian GDP.
Gold extraction, in Ecuador, has a potential of 19.4 million/ounce in resources which means $217, 6 billion in profits according to the Ecuadorian Mining Chamber.
During 2007, Aurelian Resources Ecuador, a Canadian company, discovered the biggest gold and silver deposit in the country at the south of Ecuador. The deposit has proven resources in gold of 13.7 millions/ounce and in silver of 22.4 millions/ounce. This company is a clear illustration of Ecuadorian Mining expansion and also allows the growth of the country’s economy by creating new employment sources and more investments.
There are a number of supporting factors that make Ecuador favorable for gold exploration and mining. In recent years Ecuador has done much to foster and encourage foreign investment in its mining industry. The Ecuadorian government introduced sweeping changes to the Mining Law, the highlights of which include:
- Increasing the term of concessions to 30 years (renewable)
- Streamlining the granting of title transfer from exploration to exploitation
- Establish only a 5% mineral royalty payable to the government
- Allowing foreigners to hold concessions 100% without Ecuadorian partners
- Introducing guarantees into law which secure the right to mine once a positive feasibility study has been carried out
- Abolished the concession speculation, allowing mining companies to pick properties directly from the government avoiding third party owners.