Ecuador revokes mining concessions

Demonstrators carry a coffin representing mining activity in Ecuador during a protest in front of...

Demonstrators carry a coffin representing mining activity in Ecuador during a protest in front of the government palace in Quito, Friday, April 18, 2008. The assembly writing Ecuador's new constitution overwhelmingly approved a decree on Friday to revoke most mining concessions in the country. (AP Photo/Dolores Ochoa)

(AP)

Ecuador's constitutional assembly on Friday approved a decree revoking most of the mining concessions in the country, following up on the leftist government's pledge to take greater control over natural resources.

The decision by the government-controlled assembly, which is also writing Ecuador's new constitution, revoked some 3,100 of the 4,112 active concessions in the poor Andean nation and suspended 1,220 concession requests.

President Rafael Correa, who is a close ally of Venezuelan President Hugo Chavez, said the decree will not "impede future concessions, but rather, the current ones, the majority of which are awful."

"The current dilemma is not whether to say yes to mining, but to seek economically, socially and environmentally responsible mining," he said in a presidential statement.

Ninety-five members of the 130-member body approved the measure. Twenty-five other assembly members abstained, and one voted against the decree, according to an assembly statement.

The approved decree also included the creation of a state-run mining company.

About 100 mine workers protested the decree outside the presidential palace. Opposition assembly members — most of whom abstained from the vote — are opposed to the decree.

"We are forgetting about international law," said opposition lawmaker Cesar Rhon. "We have a lot of lawsuits around the corner."

"Is this the signal we want to send to the world, that contracts aren't respected here?" he said.

Among the mining companies affected by the decree are Canadian companies EcuaCorriente, Aurelian Resources Inc., the Iamgold Corporation and the International Minerals Corporation.

Shares of Aurelian closed down 31.5 percent on the Toronto Stock Exchange after the decree was passed. Iamgold and the International Minerals Corporation registered slight losses. EcuaCorriente is not traded on the exchange.

Correa, a U.S.-trained economist, took office last year, vowing to increase state control of natural resources and the economy.

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