UPDATE: Ecuador, Ecuacorriente Reach Deal On Mirador Project -Government
01 Março 2012 - 10:09PM
Dow Jones News
Ecuador has reached an agreement with Ecuacorriente, the local
unit of Canada's Corriente Resources Inc., that allows the company
to mine the Mirador copper project, Wilson Pastor, minister of
nonrenewable natural resources, said Thursday.
At a press conference, Pastor said the contract between the
Ecuadorean government and Ecuacorriente will be signed Monday at
the presidential palace.
The agreement includes royalties of between 6% to 8%, depending
on the price of copper.
Pastor said the company plans to invest about $1.4 billion over
the next five years in the Mirador project, located in Zamora
Chinchipe province in southern Ecuador.
Ecuacorriente will pay Ecuador's government $100 million in
advance royalties to fund social projects in areas around the
mine.
Ecuador expects the company begin production late in 2013.
Pastor said the negotiating process with Ecuacorriente has been
very difficult, but the agreement "opens large-scale foreign mining
investment in the country."
According to Pastor, the agreement allows the government's share
of the project's economic benefits at a minimum 52%, including
royalties and several taxes.
"With this project Ecuador will be the world leader in terms of
how much revenue it will be obtaining," the minister said.
Ecuador's mining output currently is minimal. President Rafael
Correa's administration plans to sign exploitation and investment
contracts with at least three foreign mining companies this
year.
The Correa administration is also negotiating with Kinross Gold
Corp. (KGC, K.T) for its Fruta del Norte project and with the local
unit of International Minerals Corp. (IMZLF, IMZ.T) for its Rio
Blanco project.
Pastor has said that a final contract to allow Kinross to mine
the Fruta del Norte deposit might not go through because the
company wants to renegotiate the terms of an agreement signed with
the Andean country in December.
The main disagreements with Kinross are over base prices for the
windfall profit tax that the company should pay, and related
issues.
On Thursday Pastor said that talks between the administration
and the company continue.
Pastor is scheduled to meet this month with Kinross Chief
Executive Tye Burt.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653;
mercedes.alvaro@dowjones.com
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