Soto Article
posted on
Apr 17, 2008 08:41AM
The company whose shareholders were better than its management
(Recasts, adds Correa's comments, details)
By Alonso Soto
QUITO, April 17 (Reuters) - Ecuadorean President Rafael Correa
said on Thursday he backs suspending large-scale mining exploration
projects while a new mining law is approved to regulate the
country's nascent industry.
Correa, who has sought to tighten state control over Ecuador's
natural resources, said a new mining law is expected to be approved
in six months. A special assembly rewriting the constitution is
expected to pass a decree on Friday to suspend mining activity in
medium and large-scale exploration projects.
"Some concessions where there has been investment and
exploration and that were about to enter the exploitation phase will
be suspended for 180 days until there is a new legal framework,"
Correa told foreign reporters in Quito. "And we will write new
(mining) contracts based on that legal framework."
The constitutional assembly is working to overhaul the mining
sector, which is fueling investor concerns over whether Correa will
seek more control over mining operations as his ally, Venezuelan
President Hugo Chavez, has done with the oil sector.
It was unclear which exploration projects would be affected or
when the suspension would begin.
Correa said he supports large mining projects that will benefit
his poor nation with billions of dollars in revenues, but said
companies will have to comply with stricter controls.
The 130-member assembly, controlled by Correa's Alianza Pais
party, plans to vote on the decree that will also revoke concessions
owned companies that have not invested until late 2007 or have
failed to pay their government fees.
Ecuador lacks significant output of precious metals, but dozens
of Canadian companies such as Aurelian Resources <ARU.TO> and
Corriente Resources <CTQ.TO> are exploring for gold and copper.
Correa also said foreign oil companies working in Ecuador had
shown interest in negotiating a switch to new deals which will make
them contractors with the government, instead of joint-venture
partners as in the past. Talks over the contracts are still
ongoing.
(Reporting by Alonso Soto in Quito, ; Editing by Marguerita Choy)