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Government will open mining registry despite disagreement with indigenous people
In an interview with PRIMICIAS, the deputy minister of mines, Andrés Wierdak, explained that in December 2022 Ecuador will have a cadastre for mining companies to request concessions.
The deputy minister of mines, Andrés Wierdak , anticipates that in the second half of December 2022, the government will open the mining cadastre , which has been suspended and in purge since 2018. This instrument is an information platform that will allow companies to apply for mining concessions.
But the indigenous movements do not agree with the opening of the cadastre , and this was established in the closing minutes of the dialogue table with the government on energy and natural resources. In an interview with PRIMICIAS, Wierdak announced that this disagreement will not stop the opening of the cadastre, since he considers that this tool will help identify in which areas prior consultation should be carried out before approving the concessions.
How will the mining sector close in 2022 and what is the projection for 2023?
The goal is to close with USD 2,600 million in mining exports in 2022. But we hope to exceed that figure and reach USD 3,000 million. If that happens, we are likely to overtake bananas as the third largest export product. And we expect the sector to reach USD 3.2 billion in exports in 2023.
How many new mines are planned to be built in 2023?
New mines are planned in the Curipamba (copper) projects, in the province of Bolívar; La Plata (copper and silver), in Cotopaxi; and Loma Larga (copper), in Azuay. A fourth project would be the second stage of the Mirador (copper) project, in charge of the Chinese company Ecuacorriente. This concession is located in the Amazon province of Zamora Chinchipe. In total, the four mines imply an investment of USD 1,563 million in 2023. The mining production of these projects will start from 2024 or 2025.
How much will Ecuacorriente invest in the new mine?
The first stage of Mirador is already operating. In the second stage, it will build a new mine, with an investment of USD 750 million.
When will the mining cadastre be opened?
In the second half of December 2022. There is no way it will not come out. With the mining registry, companies will be able to request new mining concessions. The system and regulations for opening still have to be fine-tuned. With the mining registry, companies will be able to request new mining concessions.
How many concessions will be available?
At this time, there are 1.7 million hectares under concession. And we have 3.7 million hectares available. But not all areas have mining potential.
How are they going to open the cadastre if an agreement was not reached at the dialogue table with the indigenous movements?
For me that was a surprise, I participated in the dialogue tables and that was an agreement. I do not know what happened. We cannot know where to make a prior consultation if there is no mining cadastre. What is clear is that we will not assign mining rights without prior consultation, but only where appropriate; that is, where there are indigenous peoples and nationalities. They cannot say that there are indigenous peoples in all of Ecuador. For example, if they ask for a concession in El Oro, where there are no indigenous nationalities, I don't have to do prior consultation. They cannot say that there are indigenous peoples in all of Ecuador. The mining projects in production or exploration will not have any brake after the agreements in the dialogue table, because they already have titles.
So why are there delays on some projects?
There are seven projects that are about to start the construction of their mines before 2025 and they are: Curipamba, La Plata, Loma Larga, Ruta del Cobre, the second stage of Mirador, Cascabel (copper) and Warintza (copper). Of these seven projects, six are stopped because the pre-legislative consultation that allows them to obtain environmental licensing has not been given. Only the second stage of Mirador does not need it, because it is part of the project that is already underway.
What does the pre-legislative consultation imply and why has it not been given?
They are the guidelines or regulations on how to carry out an environmental consultation. The only thing missing is the publication of the executive decree.
Why haven't they issued it if it is in the hands of the Executive?
The decree is ready, but it has not been issued due to political issues. I can't give more details.
In the dialogue tables it was agreed to form a binding technical table to review mining rights already granted. What reach will it have over mines in production?
We are open to any oversight and to deliver information. But in the technical tables, the legality of including the word "binding" in the minutes of agreements will have to be analyzed.
The impression remains that this table will be able to decide whether or not to go to a project that already had a mining title
In my personal opinion, this oversight will be informative. I understand that they (the indigenous movements) want to oversee the large-scale concessions that are already operating and I don't think there will be a problem with the operators of those titles, because they meet high standards. We shouldn't be afraid.
Prior consultation was the most controversial issue in the dialogues. Does the Executive already have a proposal?
On October 25, the technical table begins to analyze that. I know that there is a draft bill from the Ministry of the Environment. The most difficult part will be to identify where the prior consultation will apply and if it will be binding.
What is the deadline to have the prior consultation law ready?
I do not see a clear horizon of how long the approval will take, especially since the National Assembly has to deal with it. Without that clarity, how will they attract mining investment? There is interest from the world's largest miners, such as Australia's Newcrest and BHP. We are trying to give positive signals. If no agreement is reached on the prior consultation law, the government must look for a plan B.
Reshared from the Telegram group (thanks Pete). Link here: https://www.primicias.ec/noticias/economia/catastro-minero-dialogo-indigenas/
Comment: I wonder whether the ongoing JV conversations around our many, as-yet-untouched licenses have been held up by this? I've tried to make it clear when there were questions and answers below but missed one or two. Probably easier to click the link, right click on the page and translate to English as I did.
Cheers and good evening all. Sean I agree that news is forthcoming.
SM
Tin hats time sharemarket
SM, I'm confused. We have been consistently told Cascabel isn't within an indigenous area, so how is this relevant to us? And what does "stopped" mean?
Morning addicknt, the indigenous people around Cascabel and indeed Alpala seem more than happy with Solgold and their contribution to the local communities. If every concession is dealt with independently (not sure it will) we shouldn't have a problem.....should we? It's all a bit messy and I'm not liking it too much.
I'm still holding tight to my shares. It would be nice if we could get some clarification from the company.
Offski.....busy day ahead.
We've been dealing with these political tangles for years - it all comes out in the wash.
Agree clarification RNS please we don't seem to be getting anything from them ATM
copper, I've asked the question.
Addicknt.......... Good man!
Doesn't this part cover us. Or is it more involved.
The mining projects in production or exploration will not have any brake after the agreements in the dialogue table, because they already have titles.
Q, it's as clear as mud, isn't it?
Agreed addicknt, let's see what type of reply you get.
At the moment I am quite relaxed about this as I am reasonably sure our ESG will cover us, and if not we will amend it such.
Just goes to prove that ESG is critical in today's mining sector.
The mining minister has explained that of the 7 cadastres that will have permission to mine by 2025, 6 have not got their environmental permissions. These have been prepared but not issued for: "political reasons". He did n ot expand on the reasons why they have not been issued.
Cascabel has never been under any indigenous threat (unlike some of CGP's). They have a clear runway to development once the environmental certificate is issued.
The minister went onto say that by december 2022, the cadastres should be available to progress. IMO - I see this as a +ve.
I also will assume that the recent co-joining of Solg and CGP will have been aware of this 'hiccup' and see it as a bump in the road to production, not a barrier.
Lasso is looking at "Plan B".
Z
Q, we also have the Investor Protection Agreement in place.
The investor protection agreement protects Solg's investment in Ecuador in that it 'could' take Ecuador to international court to try to get its money back. Good luck with that.
The agreement doesn't cover us, you can guarantee that!
Z
I have to say zoros, you're a beaming ray of sunshine!
Btw, arbitration would be in London.
As I've said we've seen these hiccups and rumblings from "indigenous groups" all down the years - did not seem to affect the recent Japanese potential investors one bit, and in a country whose future really depends on developing these mines I suspect lip service is being paid to certain sensitive issues.
If this news had come out when we were at 37p, you guys wouldn't be so spooked. What we do need is an RNS with some good news, or at least some clarification on this point, to boost the SP.
As it is, some of you have clearly been ground down by the recent low price - everything looks black, the slightest hiccup looks like the end for SOLG in Ecuador etc etc etc.
I used to feel this way back in 2018 when we could not escape the 19p level for months and the board was being mentally drained everyday by jmiley and bottomzup spreading doom and gloom. But there have been far bigger challenges from Ecuador in the past - including civil unrest - which were genuine existential threats.
To those just exasperated and at that capitulation stage, I would remind you of the words of Churchill -
"When you are going through Hell - keep going!"
Sunlit uplands ahead.
I'm no fan or Irwin but I admire his bullishness - and he's a lot richer than any of us.
Sean, I agree with all of that. It's just that with the various announcements over the past couple of years and the signing of the IPA, I'd kinda thought this stuff was behind us. It's just bleedin' boring it doesn't appear to be.
I don't think it will ever be mate - but in a poor, developing country the mighty dollar will out and the maximisation of these vast resources will steamroll ahead regardless in the long term. The wheels will be greased somehow.
Besides that - it seems to be factored into the SP. Otherwise we would have crashed to 4p this morning ;)
These things are set to try us. They just seem a lot worse when we are viewing them from a position of weakness (in price) rather than strength. Of course the BoD are no help at all, as usual.
LM, and therein lies the issue; "indigenous areas". How many times have we been told Cascabel isn't within one?
With Solgold, you can completely ignore their Corporate presentations.. and take their 'pathways to production' with the kind of credibility you would give to a used car salesman kicking tyres..
This share has been an absolute turd for too long.. and it seems the markets don't have any faith in their recent announcements or ability to close a deal.
Those expecting a payout of circa £1 and above soon, due to corporate actions need to be asking why even at this price, and after the proposed merger news, no one is interested.