China Visit Adds to Correa Pro-Mining Position

By Silvia Santacruz
Ecuador Mining News

WASHINGTON, D.C., November 26th, 2007— In a move signaling his administration’s support for large-scale mining, last week President Rafael Correa invited Corriente Resources (TSX:CTQ) to participate in his trade mission to China, where he signed bilateral agreements covering different areas, including mining. This follows Correa’s pro-mining statement a few weeks ago during his weekly radio program. View President Correa YouTube video

The news of the trade mission arrives one week prior to the convening of Ecuador’s Constituent Assembly, which on November 29th will begin altering the rules for international mining companies operating in the Andean country. The 130-member legislature body will rewrite the constitution and amend the attractive mining law, which was modified only seven years ago abolishing royalties and expensive concession fees to favor foreign investment.

But, alongside investors’ relief with Correa’s pro-mining position, there have been conflicted messages. Former MEM minister Alberto Acosta, presumptive speaker of the Assembly, is a mining critic who assures that there will be no large-scale mining operations in Ecuador. The result: nervousness in the stock market, and major companies’ indecision to merge with junior firms already in Ecuador until the Assembly debates the mining issue, probably next January 2008.

Despite Acosta’s threats to prevent large-scale mining from operating in the country, the current minister of mines and petroleum, Galo Chiriboga, has dismissed Acosta’s statements. In an interview with El Comercio newspaper, Chiriboga assured that the government’s position on mining differs from Acosta’s. Read El Comercio article

In addition to Chiriboga’s clarification, there are more positive signals for the mining industry in Ecuador. As mentioned above, last week President Correa invited representatives of Corriente to meet President Hu Jintao of the People’s Republic of China. “We continue to see strong signs that Ecuador is open to foreign investment and view this trip as an important step by the Ecuadorian Government in focusing on the urgent investment needs of the country,” wrote Corriente’s Senior Vice President, Dan Carriere, in an e-mail to investors.

Correa’s statement [in the YouTube video] about how the “future of this country might be mining,” and the China invitation to Corriente are both important to the industry due to the president’s influence over the Constituent Assembly. Eighty of the Assembly’s 130 members hail from Correa’s own political party, Alianza Pais. That gives him 61 percent of the votes, more than the necessary majority to pass any constitutional draft or new law. The Partido Sociedad Patriotica of former president Lucio Gutierrez has only 18 members, the Prian party of former presidential candidate Alvaro Noboa has nine, and other groups have five or less representatives each.

Correa’s requirements [with respect to the environment, communities, workers, and environment] for international mining firms are nothing new. Most companies are already running ambitious medical and educational programs in the communities where they operate. Thus, experienced international mining entrepreneurs are prepared to lead the nation in producing its natural resources with the best environmentally-friendly practices, and with corporate social responsibility programs.

This could be the beginning of a better future for the abandoned and impoverished remote towns with no other hope to develop, but mining. And judging from his statement about mining perhaps contributing to the nation’s future, Correa might sense this. “Several American cities, such as San Francisco and Denver, started with mining. They made this industry sustainable investing their revenue building schools and roads,” states Paul Driessen, author of Eco-Imperialism: Green Power, Black Death.