Ecuador’s government is continuing to support the development of the country’s mining industry, which for historical reasons is at an immature stage relative to other neighbouring countries such as Chile and Peru, with the full support of President Lenin Moreno. One of the major recent initiatives includes overhauling the mining tax regime and removing a prohibitive windfall tax on foreign investment. The windfall tax levied a rate of 70% based upon the difference between the sale price of the metal extracted from the ground and the base price established in the Mining Exploitation Contracts and applied only to large mines in full-scale production. Henry Troya, Vice-Minister of Energy and Non-Renewable Resources, Government of Ecuador, has said “The windfall tax for extraordinary earnings was our Achilles Heel since it was established by the Correa administration in 2009. We have seen that, when applied in other countries like Mongolia, it affected the mining GDP very seriously. Our windfall tax actually takes 70% of the extraordinary earnings when comparing the base price of the last 10 years and the commodity price during a high cycle. We introduced several modifications to this tax, yet we saw that the investment community could not understand why this was applied. So, president Moreno finally decided to eliminate it. This move has been very well received by the industry.” Another major initiative was announced by the Ecuadorian government to allow for “scout (reconnaissance) drilling” within exploration concessions. This was announced in July by a representative of the Ecuadorian Ministry of Oil, Mining and Energy (MERNNR) during a presentation at the ‘Investing in LATAM Mining Summit’ held in Santiago, Chile. As part of this initiative, mining concession holders could drill during the 4-year initial exploration phase through a simplified permitting process. Previously, drilling was only permitted during the advanced exploration phase. This is positive news for the Ecuadorian mining industry as it is likely to significantly increase the identification of mineral deposits within the initial exploration phase as well as increasing employment, bring more dollars into the Ecuadorean economy and mining investments in the first four years of mineral exploration. These two major revisions show that Ecuador is committed to developing its mining sector by providing attractive and fair investment conditions which will support the development of responsible mining. SolGold is highly encouraged by the abolishment of the windfall tax, and the continued progress the Ecuadorean Mining Ministry is making towards better policies. SolGold strongly believes that Ecuador is one of the best jurisdictions for both exploration and development.
STUDY MANAGER Eduardo is a mining engineer with an Honours Degree in Mining Engineering, from the University of Chile and Master of Business (International Management) from Curtin University in WA and extensive mining industry experience in Australia, Latin America, USA, the Middle East and Asia, working with top-tier and junior mining companies and consulting organizations including BHP Minerals, Western Collieries, Anaconda Nickel, IFC (World Bank), BHP Engineering, SKM, Hatch and Amec Foster Wheeler among others. Eduardo’s background includes:
- Extensive project management and mine operations experience across a wide range of mining projects and commodities including copper, gold, silver, zinc, nickel, iron ore, lithium, coal and industrial minerals.
- Extensive multi-disciplinary feasibility study management experience covering geology, mine planning, ore processing, materials handling and infrastructure, involving a variety of mining projects in Australia and overseas.
- Strategic planning, business development, and mine consulting experience covering most technical and operational aspects of mining and project improvement.
- Experience in project financing with the International Finance Corporation (World Bank) both as staff member based in Washington DC and subsequently as a consultant providing advice to the IFC on mine project financing primarily in the Asia Pacific and Latin America regions.
- Corporate experience including roles such as Technical Director, VP Business Development, Non-Executive Director, and Non-Executive Chairman with ASX listed companies.
- Experience in the sourcing, evaluation, and acquisition of mine exploration projects in Latin America and Australia.
- A wide network of mining industry and project financing contacts in Australia, Latin America and the USA.