Royalties from 3% to 8% in mining area September 09, 2008 Quito

The draft Mining Law raised by the Government to replace the current rule states that the mining industry must pay royalties and progressive variables that fluctuate between 3% and 8%, according to the document released yesterday.

Royalties, which in the current regulations are not, will be set according to production levels and regulations will establish criteria and parameters to implement scales and percentages.

Contrary to what happens with the tanker division, where 70% of surplus goes to the Treasury, determines that the proposed mining royalties distribution is as follows: 40% for parish boards and municipalities.

25% for the creation of an environmental fund to guarantee post mining, 20% to fund training for small and artisanal mining, 10% for the state budget, and 5% to execute research programmes.

Similarly, the draft provides for an annual base price of minerals, which will be determined by the Ministry of Mines, which is programmed to transmit to the London Metal Exchange or technical agencies.

With the validity of the new mining law, the State will give mining rights for up to 30 years.