"Correa's high approval rating" ... I was wondering where to find a current, accurate/unbiased source of data for Correa’s approval rating. Found an Angus Reid article ...

http://www.angus-reid.com/polls/view...

… which indicates that Correa’s approval rating was on the rise earlier this year. It looks like Angus Reid’s source polls monthly. It will be interesting to see what April’s poll results look like when they come out which, based on timing of the March results being published through Angus Reid, should be fairly soon.

Correa's approval rating was slipping badly until this recent dustup with Colombia. Nothing like a bit of patriotic fervor to distract people's attention from poor economic performance. You'd almost think it was planned. It was certainly very convenient.

"lack of relevance for most Ecuadorians" ... True, or not? Some Ecuadorians are directly affected and suffering loss of income as a result of the mining mandate but it would seem to be a relatively small percent of the population. Is mining and the potential economic benefit a big issue or is it pretty low on the list of concerns or level of awareness for the majority of Ecuadorians?

I'd say it's low on the list of most people's priorities. To anyone who understands the threat of declining oil production (a combination of mismanagement, physical decline, and lack of exploration) and the need to replace that lost income, it's a major priority. Unfortunately, those people are a minority, both inside and outside of govt..

“Although Correa came to power with the support of a large part of Ecuador's indigenous peoples, many organizations representing this constituency have threatened widespread protests to demand an end to mining …”

I have not seen too much in the way of posts or news indicating that anti-mining protest activities were taking place. I guess the key word might be threatened.

Do some background research on Ascendant Copper and Corriente Resources. Both were shut down for the above reasons.

“By suspending mining operations, the decree allows Correa to postpone conflicts with indigenous and environmental groups and avoid clashes within his own party until after elections.”

I’ve been trying to understand the rationale for the suspension of activities. This statement seems to me to be offering a reasonable explanation for Correa’s support for the suspension. The benefit to Correa outweighs the potential cost relative to achievement of his objectives.

It's a risky gambit. Intelligent people see this as a sell-out, not a comprimise. It indicates he is being led by factions within his own party, rather than leading them. Not a good image to present in a country where strong leadership is expected from presidents.

“Correa calculates that: high prices and strong demand for minerals will discourage mining companies from leaving and encourage more investment; foreign investors will respond favourably to a higher royalty regime if the government proves reliable, and promotes law, order and a stable investor environment; and if successful, he would be able to take credit for making mining more profitable for the state.”

This seems to sum it up from my perspective … key word being “if”.

Correa has miscalculated badly here, IMO. Some (including myself) thought he set a trap for Acosta, but I'm now starting to think Acosta set a trap for him. I don't see how anyone will risk serious money in Ecuador now after everything that's happened in the past year. That applies to all forms of foreign investment, not just mining. Foreign investment was off some 38% in 2007, compared to 2006. I see no reason for that trend to change.

Captive investments such as Aurelian will most likely be developed, but as usual the terms are unclear. Anything without a defined resource will be abandoned is my guess. We're starting to see this already, and I'm sure that was Acosta's intent. He's been consistently anti-mining from day one. The comprimise (if you can call it that) lets existing development go ahead, but effectively puts the brakes to any future exploration.

Some months ago Silvia Santacruz of Ecuador Mining News ran a poll which posed the question: "Have you sold any portion of your shares due to unease?" The main issue at the time was a windfall tax. 40% of investors indicated that they'd divested some part of their holdings. I'd be interested to see the results if that poll were taken today. I'd also add the question: how many investors feel trapped and would head for the door at the first opportunity to break even?

Correa has one thing right: high prices and strong demand for minerals He ought to know, since his govt. is just one of many that are causing those prices to rise by discouraging investment. I guess you can thank him for that. It means marginal production in friendlier jurisdictions will continue for some time. That's good news if you own BHP, RTP, CVRD, etc. Not good news for the environment though, but I guess it's OK if your goal is to think locally and act locally.

ebear