Government proposes variable royalty on mining projects - Ecuador Published: Thursday, June 26, 2008 18:15 (GMT -0400) By Harvey Beltrán, Business News Americas SendPrintReprint PermissionEcuador's mines and energy ministry will present a bill to regulate the mining sector that includes a proposal to apply a variable royalty on mining throughout the country, a ministry official told BNamericas. Related content Keywords Privatization/Concession Government/Regulations "Depending on the characteristics of the project and the production volume, we want to apply a variable royalty," said ministry's adviser Javier Córdoba. Since each project is unique, some will pay a 5% royalty and others a 3% royalty, according to the official. "We are thinking about figures similar to the ones applied in Chile, which has a 5% ceiling," he added. The president of Ecuador's mining chamber, César Espinosa, told BNamericas that the proposal will definitely include economic terms for mining. "But a clear definition of the parameters hasn't been drawn up yet," he said. The chamber proposes that the royalty be calculated based on a percentage of export profits, Espinosa said, adding that "it hasn't been decided how the calculation will be made but in terms of whether there will be a royalty, there will be a royalty," he said. Córdoba said the reform bill includes a specific chapter on royalties that will offer more detail - after an agreement is reached - on figures and parameters. Under Ecuador's current mining law, companies pay US$16-32/y per hectare of land put to use.