Ecuador Congress gives green signal to fresh mining bill

QUITO (Scrap Monster) : The lawmakers of Ecuador gave a thumping approval to the country’s new mining law, which is expected to attract more mining investments in a country that has huge untapped mineral resources.

The Congress passed the bill with 105 votes in favor, 14 against along with 14 abstentions. The Government of Ecuador intends to reduce its overdependence of the country on oil exports by attracting large number of small to medium scale mining investments. The Andean nation is believed to have huge untapped mineral resources including gold, silver and copper.

The law proposes 3% mining royalty to be paid by small sized miners, 4% royalty to be paid by medium sized miners and a minimum of 5% to be charged from large scale miners. The law also puts a cap of 8% on mining royalties for exports of gold, silver and copper. The large scale mining companies will have to pay windfall tax, however the miners could defer the payment of windfall tax until complete recovery of their mining investments. The law also calls for elimination of red tape and tougher action against illegal mining activities. In addition, the law also outlines better environmental protection guidelines.

It was only during last week that Canada based Kinross Gold Corp announced its decision to pull out of Ecuador’s Fruta del Norte gold and silver deposits over tax dispute.