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By Carlos Zorrilla, May 2, 2008

en espaniol cuando tenga un chance..

Reflections on Ecuador’s Mining Mandate.

It’s easy to see why Canada’s mining companies have spent so much money on publicity to try to lessen the public relations nightmare caused by the Constitutient Assembly’s 95-1 passing of Ecuador’s Mining Mandate, which annulled 88% of the country’s mining concessions- including all of the big ones held by the Canadian companies. It’s even understandable that Canada’s Ambassador to Ecuador would go with a squad of Canadian mining company owners and managers to meet with Ecuador’s president so publicly as they did last week. When there’s so much at stake, anything goes.

Just what is at stake? The Mining Mandate abolished 4,474 mining concessions by passing the Mining Mandate this past 15th of April; approximately 600 were left after the onslaught, most are small mines and medium non-metallic projects (cement and building materials). Not a single large-scale metallic mine project should be left standing if the Mandate is implemented as it was meant to be by the Assembly. The main parameters for the abolition of concession rights include:

Concessions owners may only own three concessions (totalling 15,000 hectares)
It forbids mining in protected areas and their buffer zones, as well as if the project threatens water resources (what metallic mining project doesn’t?);
It abolishes concessions rights if the concessions were given to government functionaries, or their relatives. There’s rumors that this could hit the Ecuacorrientes project, among others.
It puts a freeze on all mining activities: the only exceptions are the 600 small projects not affected by the Mandate
It prohibits the approval of new mining concessions
Any concessions owner not up to date on their payment of patents to operate lose their concessions.
The Mandate also calls for the creation of a state-owned mining company- which has a lot of mining company owners very worried.

The mandate does allows mining to go ahead if the companies have invested in exploration and related activities, but not if it falls under the other categories. In other words, none of the large project will remain viable.

These measures are effect until a new mining law is drafted, in about six months time- which must be approved by the same Constitutient Assembly that approved the current Mandate! And not even the president can veto the mandate.

By the way, the anti-mining crowd cheered the Mandate, though not too loudly, because some expected the mandate to once-and-for-all call for a large-scale mining ban.

The parameters, if applied objectively, will stop all of IMC, IAMGOLD, Aurelian, Dynasty’s, All Metals, Corriente Resources (Ecuacorrientes project), and Lowell’s – as well as most other metallic mining project in the country, unless they were exploiting at the time of the Mandate’s approval. Ascendant Copper lost their JUNIN concessions in January of this year, but this new legal mesures means the loss is permanent (the project poses a great threat to water resources). None of these companies were exploiting minerals- and most- if not all- do not even have their environmental impact studies approved for exploitation or exploration.

What happened in Montecristi? The Mandate’s overwhelming approval took pro-mining circles here by surprise (to say the least). This was in part because many thought Assembly members would go a bit easier on the Mandate, given President Correa’s seeming support for mining. But, inside the Assembly there is a very strong anti large-scale mining faction, led by the very popular ex-Minister of Energy and Mines, Economist Alberto Acosta, who belongs to Correa’s Alianza Pais political party. Mr. Acosta has no problem stating his anti-large scale and open pit metallic mining stance. He’s an economist and knows very well what mining means to developing countries.

This issue, more than any other to date, has caused a deep divide within the Alianza Pais, who won 60% of the Assembly’s seats in last year’s election.

Counter attack….. So, nowadays the companies are applying tremendous pressure– not to have the Mandate abolished or vetoed (which is impossible), but to soften it as much as possible. They’ve also enlisted Canada’s Ambassador (!) and Ecuador’s Chamber of Mining (plus, unfortunately, the press is blindly-and well paid- on their side). The companies and their public relations firms are using scare tactics (thousands laid off, the country will go bankrupt, investors will flee….!!), and threats (we’ll hold off on the international lawsuits if only…). And, a lot of money is being spent on trying to convince Ecuadorians that mining will really lift them out of poverty and will solve all of the country’s problems- and it won’t pollute!!

Mr Correa has recently shown signs of weakness by making pro-mining statements and rabidly attacking the opposition to mining every chance he gets- though he has been vague enough to possibly let it be interpreted that he is not against STATE-OWNED mining. The President also means to renegotiate mining deals if private mining is permitted in order for Ecuador to actually make money from mining (a radical idea indeed…!) This would include high royalties (perhaps as high as20%), and a 70-80% Windfall Profit Tax (which has been discussed by Ministry of Energy and Mines official this year).

The upshot of all this is that there are many mining company owners that are worried sick- and not just about losing a few hundred million dollars here in Ecuador, but about the potential spread of the Mining Mandate affect to other developing countries. They may not be too worried about whole-scale nationalization of mines (though I would be if I was them), but the steep rise in royalties and windfall profit tax must keep them up at night.

Everyone knows that natural resources of these countries have been ripped off left and right by transnationals for centuries, ruining economies, and leaving the people impoverished, and to face long-lasting social and environmental havoc. All Ecuadorians have to do is look over the Andes at the horror left behind by 30 years of petroleum exploitation in the Amazon to know this isn’t just talk.

So… the rush is on by the transnationals and their in-house plenipotentiary representatives to kill this initiative before it spreads like wildfire. A Mayor from an anti-mining local government has publicly said there are hundreds of millions of dollars earmarked by mining companies to win the hearts and votes of Assembly members. On the other hand, the resistance to large-scale metallic mining has never been stronger in Ecuador.

Unlike in the past, the resistance now includes all of the powerful indigenous organizations, who this year joined with all of the human-rights, communities, and environmental groups. And, given that the vote was so overwhelmingly pro-communities and anti- mining last month, there’s every chance that no matter how much the companies spend, the Assembleistas are not going to sell their vote to betray they something they so whole-heartily belive in- an Ecuador free of large-scale metallic mining.

Carlos Zorrilla

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By Carlos Zorrilla, April 19, 2008

IT’S ALL OVER FOR LARGE-SCALE MINING IN ECUADOR

(Español ya mismo….)

In the last few months, the mining companies spent millions of dollars in publicity to try and convince Ecuadorians that large-scale mining would get them out of poverty, create thousands of new jobs, and bring millions in rents for the government as well as prosperity for everyone. However, today, Ecuador’s national Constitutional Assembly passed the Mining Mandate, which will cause the “extinction” of most of the nation’s mining concessions. The Mandate was passed by a 95 to 1 margin, with 25 abstentions.

The Mandate, composed of 12 articles, sets out the reasons for the extinction- without recourse for recompension- of all the mining concessions where no previous consultation took place with the communities, as of March 31 2007– Just this measure alone will annul all- or nearly all- the mining concessions given out by the government since the 1998 Constitution, the year this safeguard went into effect. This measure should extinguish about 90% of Ecuador’s large-scale metal mining projects- including Canada’s Ascendant Copper’s, IAMGOLD, AURELIAN, ECUACORRIENTE (CORRIENTE RESOURCES), AVALANCHE, ALL METALS, DYNASTY, LOWELL, and many others.

The Mandate sets out other causes for the extinction the concessions- including all mining projects that may impact water resources , and those found within private or public protected areas and their buffer areas (article 3). Those projects that have not kept up their dues with the Ministry of Mines and Petroleum will also lose their concessions, as well as those who have not invested in exploration activities, or in developing their projects.

The only metallic mining projects able to continue operation, according to article eight of the Mandate, are those which are currently in the exploitation phase and which have complied with the previous consultation constitutional guarantee. It’s worth mentioning that there are no large-scale metal mining projects in the exploitation phase in Ecuador.

NEW MINING LEGISLATION
Six months from today, was the time given by the Mandate for the government to draw a new mining legislation- which will include a national mining company- something spelled out in the Mandate.

LIMITS TO CONCESSIONS: THREE PER COMPANY
Concessions numbering more than three per individual or company (including subsidiaries), are likewise extinguished. this limits the number of hectares per company or individual to 15,000 hectares (5000 hectare per concession max). Most companies own dozens of concessions- including Ascendant, Ecuacorrientes, etc. In the case of Ecuacorrientes, until 12 noon today, they owned more than 62,000 hectares within more than a dozen concessions. Now, depending on how the Mandate is interpreted, they own nothing. Ascendant is in a similar boat- if they didn’t lose all their concessions for failing to undertake the previous consultation (and we are not aware that the communities were legally consulted anywhere in Ecuador), they will lose all but three of their concessions. Their crown jewels, Golden 1 and Golden 2, the company lost in January of this year as a consequence of legal decision taken by the Ministry of Mines and Petroleum- the Mandate is a far stronger legal measure, which leaves no room for a legal challenge. The nature of the powers vested in the National Constitutional Assembly makes it impossible to legally challenge the body’s decisions- and not even Ecuador’s president can do anything about it.

At least in the case of the mining concessions in the Intag area, not a single mining project has dutifully complied with this constitutional guarantee. This not only includes Ascendant Copper, but also Avalanche, and Lowell Mining, as well as others. At the national level, this will cut down 3,000 or more concessions- mostly belonging to Canadian companies.

Many analysts feel the mandate seeks to wipe the slate clean with mining in Ecuador, in order to create much more favorable conditions benefitting the country. The current mining law, modified and paid for by a World Bank project in the 90′s, is seen as a particularly harmful for the country’s interests. The law exclusively beneffited the mining companies. A big question remains whether the new mining law, which should be ready in 180 days, will permanently prohibit all large and medium scale metal mining in Ecuador. There is widescale support within and without the National Assembly for an Ecuador free of large and medium scale metal mining. After the Mandate, the conditions could hardly be better for it to come about.

We in Intag see it as an amzing victory of people power over huge vested interests. As mentioned earlier, the mining companies spent millions of dollars to publicize their pro-mining agenda. Just in the past 48 hours alone, the TV, radio and printed press were indundated with such publicity. There were also wide-spread rumors of hundreds of millions of dollars invested in vote gathering within the Assembly. In the face of this unbelieable onslaught, it is nothing if not amazing that our position won- with the support of some very couragous and ethical members of the Assembly.

TONIGHT WE CELEBRATE THIS TRULY AMAZING VICTORY OF RIGHT OVER MIGHT AND BELIEVE THAT IT WILL LEAD TO AN ECUADOR FREE OF LARGE AND MEDIUM SCALE METAL MINING IN THE NEAR FUTURE!

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By Carlos Zorrilla, April 16, 2008

Mining Mandate: end to large-scale mining in Ecuador / (español ya mismo…)

For the past three months, Ecuador’s Constitutional Assembly has been working on a mining mandate meant to fix some of the worst aspects of the discredited mining law, which did little besides legalize the trafficking of mining concessions, leaving the country without any real benefits. Yesterday, the Assembly finally issued the final text of the Mandate which will be debated and likely approved by the end of this week.

The Mandate will revoke all mining concessions that, among other things:
a) Have not invested in exploration activities to March 31 2007
b) Have not presented, nor have their environmental impact study approved
c) Number more than three concessions per company or individual
d) Threaten water resources or are found within or inside protected areas

STOP WORK ORDER.
In addition the mandate puts and end to all activities within all large and medium scale metallic mining projects not affected by the previous limitations until a new mining law is enacted- which should come about not later than five months after the new constitution comes into effect.

FREEZE ON NEW CONCESSIONS
The mandate also orders a moratorium on the issuance of new mining concessions until the new mining law is enacted (this is a process that could take about a year)

Finally, the mandate calls for the creation of a state-owned mining company- which is wreaking havoc on the nerves of most mining companies

The effects of the mandate, once approved, will revoke more than 90% of the country’s concessions- and possibly 100% of those not in the exploitation phase.

The nature of the Constitutional Assembly makes it illegal for any of its decisions to be overturned.

For Ascendant Copper’s Junin project, it means the end, since the company has notinvested in exploratory activities (according to Ecuadorian law), nor does it have their environmental impact study approved. In addition, the project heavily threatens water resources, and is within a protected area’s buffer zone.

The measure has been described by Ecuador’s mining chamber as a confiscation.

Source: http://www.eluniverso.com/2008/04/16/0001/8/569738D66AB34E7CB62845700C400771.aspx

MandatoMinero : fin a la mayoria de las concesiones en el Ecuador

Durante los ultimos tres meses, la Asamblea Constitucional del Ecuador ha estado trabajando en un mandato minero para arreglar algunos de los peores aspectos de la desacreditada Ley de Mineria , que no sirvio mas alla que para legalizar el trafico de concesiones mineras, y no ha significado ningun beneficio para el pais. Ayer, la Asamblea emitio finalmente el texto final del Mandato, el cual se debatira y probablemente sera aprobado antes de finales de esta semana.

El Mandato revocara todas las concesiones mineras que incursan en las siguientes causas:
A) No haber invertido en actividades de exploracion al 31 de marzo de 2007
B) No haber presentado, ni tienen su estudio de impacto ambiental aprobado
C) Que sobrepase de tres por persona natural o empresa
D) amenazan a los recursos hidricos o se encuentran dentrode, o en el interior de las areas protegidas o sus zonas de amortiguamiento

Ademas, el mandato pone fin a todas las actividades dentro de todas las grandes y medianas escala de los proyectos mineros no metalicos no afectadas por las limitaciones anteriores, hasta una nueva ley de mineria sea promulgada-lo que deberia producirse a mas tardar cinco meses despues que la nueva Constitucion entre en vigor.

Las revocatorias no se aplican a la mineria a pequeña escala.

Congelacion de las nuevas concesiones
El mandato tambien ordena una moratoria de la emision de nuevas concesiones mineras hasta que la nueva ley de mineria se promulga (se trata de un proceso que podria tomar cerca de un año)

finalmente, el mandato crea una corporación minera estatal- preocupando el sector minero privado.

Una vez aprobado, el mandato causara la revocatoria de mas del 90% de las concesiones del pais-y, posiblemente, el 100% de los que no se encuentren en la fase de explotacion.

La naturaleza de la Asamblea Constituyente, hace ilegal para que sus decisiones sean a cualquier de sus decisiones.

El mandato minero significa el FIN Para el proyecto JUNIN de Ascendant Copper, ya que la empresa no ha invertido en actividades exploratorias (de acuerdo a la legislacion ecuatoriana), ni tiene su estudio de impacto ambiental aprobado. Ademas, el proyecto pone en riesgo recursos hidricos, y se encuentra dentro de una zona de amortiguamiento de una area protegida.
(disculpas por la faltas ortográficas- esta vaina no tiene tildes)
http://www.eluniverso.com/2008/04/16/0001/8/569738D66AB34E7CB62845700C400771.aspx

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By Carlos Zorrilla, March 31, 2008

Ascendant’s Unbelievable 2007 Year-end Reports

Yes, it’s that time of year again!! Ascendant just published it’s 2007 Financial and Management and Discussion Analysis reports, and here are some of the more interesting information contained in the reports and what they “forgot” to include.

The documents avoid mentioning important events that could profoundly affect Ascendant’s future in Ecuador, which transpired during the past 12 months, and makes the following incorrect claims:

a) It says nothing of the fact the government legally annulled the company’s main concessions in Ecuador; its Golden 1 and Golden 2 concessions. The reports state that the company received a government communication that purports to annul said concessions, but in fact, the annulment is legal and is in full effect. In spite of the loss of the concessions, the company continues to list the ex-properties as currently owned. The loss of the concessions clearly constitutes a material event which was not reported.

b) The company’s purposely avoids mentioning that in October of 2007, the government, through it’s National Institute for Agricultural Development (Spanish acronym: INDA ), annulled the ownership rights to 17 of the company’s properties in the Junin area. The company had purchased these properties, as it has maintained in the past, to access its Junin mining concessions. Loss of the properties puts the future development of the Junin project at risks.

c) The company fails to disclose that in late 2006 its Environmental Impact Study was rejected by Ministry of Mines and Petroleum officials. It misinforms the public by stating that it is in the process of responding to observations made to the study. There is huge difference between making observations to an EIA, and having it outright rejected on technical and legal grounds by government officials.

d) The company is still maintaining that it owns the challenged inferred mineral deposits in its Golden 1 and Golden 2 Junin concessions, even though:

i. It no longer owns the concessions

ii. Micon International affirmed in 2007 it could no longer verify its earlier, and inflated, estimates due to damage, loss and or theft of original core samples.

As you recall, in 2005 CEDA challenged the legality of MICON’s work in establishing the inferred mineral content of the company’s Junin deposit.

e) As in previous years, the company claims to have incurred exploration costs on its Junin mining concessions. For 2007, it claims to have incurred 1,9 million dollars in such costs. Yet, the last year any exploration activity was carried out in the Junin area was in 1996. Furthermore, and as the company itself admits in the reports, the company has been unable to get it’s Environmental Impacts Study for exploration approved. It is illegal to undertake any mining activities in Ecuador without approval of Environmental studies. The misleading information published by the company could give investors a false idea that the company is engaged in exploration activities in the Junin concessions when nothing could be further from the truth.

f) There are several business transactions between ex-company directors and the present board involving hundreds of thousands of dollars (see Telimbela and Magdalena properties, pages 13-14 Consolidated Financial Statements). In light of the uncertainties surrounding the future of mining in Ecuador resulting from the change in government and the fact that Ascendant already has lost the title to several mining concessions, plus the government’s widely publicized plans to re-write the mining legislation and to pass a mining mandate that would annul thousands of mining concessions, some of these dealings are highly suspect.

g) Losses. 2007 was a record year for Ascendant. The company lost $10.4 million in the past 12 months, and claim to having spent $ 5.6 million of that on exploration; about 50% more than in 2006. As the company was busy losing money, properties and whole concessions, the wages and benefits, nonetheless, increased from $1 million to $1.7 million.

http://www.ascendantcopper.com/Content/FlashPaperEng/ACX_MDA%20YE123107%20FINAL.swf
http://www.ascendantcopper.com/Content/FlashPaperEng/ACX%20FS%20YE123107-FINAL.swf

Los increibles informes de Ascendant para el 2007
Ascendant acaba de publicar sus informes gerencial y economicos del anio 2007. Entre las cosas mas destacable que alegan, es la siguiente:

El informe alega u omite la siguiente informacion:

a) No menciona la revocatoria de la Golden 1 y Golden 2 (alegan que el oficio del gobierno pretende, o alega, revocar las concesiones)

b) Debido a varias ilegalidades, el Instituto Nacional de Desarrollo Agricola anulo 17 titulos de propiedades de Ascendant en 2007. Sin embargo, los informes no lo mencionan. En anteriores ocasiones, la empresa habia dicho que habia adquirido dichas propiedades para acceder a sus concesiones.

c) La empresa sigue insistiendo que es propietaria de las concesiones Golden 1 y Golden 2

d) Todavia usan el exagerado calculo del yacimiento de cobre hecho por Micon Internacional en el 2005 (4X mas alto de que los japoneses encontraron). En el 2007 Micon alego publicamente no poder confirmar su calculo debido a danios a las muestras geologicas!!

e) En vez de decir que el gobierno le rechazo el Estudio de Impacto Ambiental, dice que la empresa se encuentra “estudiando” las observaciones hechas a dicho estudio.

f) y alegan que la decision de suspender sus actividades (en sept) fue decision de la empresa

g) Perdidas. Ascendant rompio records en el 2007. La empresa perdio $10.4 millones durante los ultimos 12 meses, y alega haber gastado $ 5.6 en exploracion; aproximadamente 50% mas que en el 2006. A la vez que la empresa estaba perdiendo plata, propiedades, y concesiones, los salarios y beneficios, sin embargo, incrementaron de $1 millon, a $1.7 millones.

http://www.ascendantcopper.com/Content/FlashPaperEng/ACX_MDA%20YE123107%20FINAL.swf

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By Carlos Zorrilla, March 24, 2008

Ecuador Takes One Step Closer to Nationalizing Its Mining Industry
(and other news….)

On his weekly radio address to the nation on the 15th of March, Ecuador’s president told Ecuadorians he would exploit its mineral resources in the south of the country through the creation of a national mining corporation. The last 6 or so months, Correa has expressed support for exploiting the four large gold-copper deposits in the south (belonging to Aurelian, Corrientes Resources, Iamgold and IMC- all Canadian corporations) As for Ascendant’s ex-Junin project, when mining comes up in Correa’s pro-mining speeches Junin and Intag are never mentioned, and no mining is planned for the north of the country (the status of Ascendant’s ex-Junin concessions has not changed- they are in the hands of the government)

The seemingly pro-mining stance by the president is in direct opposition to the anti large-scale mining position most Constitutional Assembly members, and most of Ecuador’s civil society holds. Additionally, in all the public forums organized by the Constitutional Assembly, the answer has been a resounding NO to large-scale mining projects. During the past 3 months, this position has received very strong support from Ecuador’s largest indigenous organizations, including CONAIE and ECUARUNARI. The latest manifestation of rejection to large-scale mining came on the 11th of March as part of a multitudinous march on the capital by thousands of indigenous from all over the country.

It is the Constitutional Assembly, and not the President, who will re-write the constitution. In this context, there are calls from several important sectors of the nation, including major political parties, to ban all large-scale metallic mining projects. It is this issue, more than any other, which has created the most friction within Correa’s own party.

Meanwhile, the plans for the mining mandate are on hold. The mandate would annul those concessions that were not annulled in January of 2008,until such a time that a new mining law is approved by the yet-to-be elected national congress (which could be a very long time). There are several versions up for debate, and most of them call for ban on large-scale and open-pit metallic mining in Ecuador.

And other news….
Ascendant has made the news in other forums. For example, it had the distinction of being on the list of mining companies criticized by the February 14 report of the Earthworks-Oxfam’s No Dirty Gold Campaign, which lists companies criticized for various unethical behavior, including violating human rights, dumping wastes on rivers and oceans, for their alleged involvement in armed or militarized conflict, or forced relocation of nearby landowners and/or indigenous peoples. http://www.mineweb.com/mineweb/view/mineweb/en/page68?oid=46846&sn=Detail

In the “Additional News From the Weird” category, it now seems official that Ascendant will acquire St Genevieve Resources. The Montreal-based company has a couple of highly unproductive mines in Arizona and seemed on the brink of total meltdown. The company’s stock price has hovered at 1cent per share lately (yes, $0.01). Ascendant’s own shares have hovered in the 10 cent range recently, and have been on a downhill ride for quite sometime. Without its Junin mining concessions, and the disappointing Chaucha drill results (bad enough to scare off its Chilean partner earlier last year), there’s really nothing to Ascendant. Chaucha’s exploration results, it’s worth mentioning, was earlier evaluated by a paid Ascendant employee.

La nacionalizacion de los recursos mineros mas cerca en el Ecuador
El presidente Rafael Correa, en su ultimo discurso semanal radiofonico (Sabado (15-03) le dijo a la nacion que explotaria el cobre y el oro en el sur del pais a traves de la creacion de una corporacion minera nacional. Durante los ultimos seis meses, Correa ha expresado su apoyado a la explotacion de cuatro yacimientos de oro y cobre en el sur del pais (pertenecientes a Aurelian, Corrientes Resources, Iamgold and IMC- todas empresas canadienses) Junin e Intag nunca se mencionan, y ninguna mineria esta concebida para el norte del pais (el estatus de las ex-concesiones de Ascendant en Junin no ha cambiado- permanecen en manos del gobierno)

Esta postura por el presidente se encuentra en oposicion directa a la posicion de la mayoria de los asambleistas, y la mayoria de la sociedad civil ecuatoriana. Ademas, en todos los foros publicos organizados por la Asamblea Constituyente, la respuesta a sido un contundente NO a la mineria a gran escala. Durante los ultimos 3 meses, dicha posicion ha recibido un fuete respaldo de parte de las organizaciones indigenas mas grande del Ecuador, incluyendo a CONAIE y ECUARUNARI.

Es la Asamblea Constituyente, y no el presidente, quien elaborara la constitucion. Y, dentro de este contexto, ha habido varios reclamos de importantes sectores del pais, incluyendo de parte de importantes partidos politicos, para prohibir todo proyecto minero metalico a gran escala. Mas que cualquier otro tema, este es el que mas friccion ha creado dentro del partido de Correa.

Mientras tanto, los planes para el mandato minero esta en espera (yamismito). El mandato anularia las concesiones que no fueron anuladas en enero del 2007, y suspenderia nuevas concesiones hasta que la nueva ley de mineria sea redactada por el congreso nacional, aun por elegirse (lo cual podria demorar mucho tiempo). Existen varias versiones en discusion del mandato, y la mayoria prohibirian la mineria metalica y a cielo abierto en el Ecuador.

Por otro lado (y en la categoria de Aunque Usted no lo Crea), Ascendant se encuentra en proceso de adquirir a St Genevieve Resources, una pequenia y practicamente bancarrota empresa canadiense con un par de minas impresionantemente improductivas en el estado norteamericano de Arizona. El precio de las acciones de St Genevieve es de un centavo de dolar por accion- la de Ascendant esta por los 10 centavos de dolares… ¿Que estaran pensando los inversionistas??

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By Carlos Zorrilla, March 14, 2008

NIGHTMARE ENDS FOR ACCUSED IN INTAG

Huge victory for Intag residents opposing Ascendant’s mining project

On March 14, the National Constitutional Assembly overwhelmingly approved a general amnesty in favor of 360 defenders of the environment who were facing criminal lawsuits as a consequence of their opposition to large hydro, petroleum, and mining project in Ecuador.

Included in the amnesty were all Intag residents facing lawsuits presented by Ascendant Copper, or persons linked to the company. What this boils down to is that all these criminal lawsuits will be annulled.

In all, over 40 Intag residents will benefit from the Assembly’s decision.

Meanwhile, the Assembly is still mulling over the mining mandate to annul thousands of mining concessions in the country (see our previous updates)

INTEÑOS BENEFICIADOS POR DECISIÓN DE LA ASAMBLEA NACIONAL CONSTITUYENTE

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By Carlos Zorrilla, February 29, 2008

ASCENDANT COPPER LEADING MINING COMPANIES TO THE CHOPPING BLOCK

The government let the official cat out of the bag today by stating that next week the Constitutional Assembly will vote on the mining moratorium and revocation mandate. The Assembly was voted into power last year with the main goal of re-drafting the country’s Constitution, and has the power to legislate.

Though there are several draft versions of the mandate making the rounds, all of them apparently call for a revocation of all large mining concessions (over 200 hectares in some versions). Some versions call for a total ban on large-scale metal mining projects, and to all mining in certain biodiverse or water-rich catchment areas. Mining will also very likely be off limits in all indigenous territories.

According to reliable sources, at least one version calls for the juiciest mining concessions to be taken over by a proposed state mining corporation.

Elements in common with many of the draft mandates is a moratorium on new mining concessions, a virtual moratorium on large-scale mining and the issuance of new concessions until a brand new mining law is drafted, which is meant to bring much higher rents to the country, and to institute much stronger social and environmental safeguards. However, today the Ministry of Mines and Energy said that mining will only proceed if it is clearly in the benefit of the country, and let it be known that the current mining law has only benefited mining companies and created social unrest. He went on to say that this year the government will introduce a new mining law.

Until such a law is drafted and approved by the yet-to-be elected Congress, many, many months will come and go.

The new law will undoubtedly limit or do away with large-scale or open-pit mining projects, reinstate the royalty at much higher rates, and raise taxes for the mining companies. Environmentalist sectors foresee very stringent social and environmental regulations in the new law, with free, prior and informed consent of all communities and local governments potentially affected by the projects as one of the most important safeguards. In the best of cases this would apply to small and medium scale mining projects, since most indigenous organizations, communities and environmental organizations are betting for an end to medium and large-scale metal mining, and all open-pit.

In his news conference today the Minister of Mines and Energy referred to the fact that some large-scale mining projects have caused “serious frictions between environmental groups and rural communities that are opposed to mining in their territories ”; very likely in parte referring to the well-publicized violence and conflicts linked to Ascendant’s presence in the Intag area (site of its Junin project, which the company lost title to in January of this year)

To further dampen the mining panorama for mining companies in Ecuador, as of two months ago, the biggest indigenous organizations have come out strongly against large-scale mining. This includes the powerful Ecuarunari and CONAIE, Latin America’s most powerful indigenous organization. These organizations join hundreds of other smaller, social, human-rights and environmental groups opposed to mining as a model of development in Ecuador, with sovereign issues, the threat to water and mining’s environmental impacts being some of the more important main rallying points.

The mining companies, meanwhile, keep spending millions of dollars in publicity, and of late even gained the support of the government of Canada, who has been co-hosting forums with mining companies and selling the squeaky clean-and false- image of the responsible Canadian corporation (the ultimate oxymoron in the mining world)

Keep tuned. There’s a good chance next week, the Constitutional Assembly will vote on the mining moratorium.

The Ministry’s news conference (in Spanish) can be accessed at: http://www.univision.com/contentroot/wirefeeds/lat/7419316.html

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By Carlos Zorrilla, February 6, 2008

Ascendant’s Downfall

Carlos Zorrilla

The government of Ecuador recently annulled the main concessions to Ascendant Copper Corporation’s Junin project; the company’s most valuable resource. The reasons for Ascendant’s title revocation has nothing to do with unpaid mining patents, the main reason the government revoked many of the 585 other mining concessions in Ecuador. And, it’s likely that thousands of other concessions will also soon be revoked.

Investors shouldn’t complain that they weren’t warned about Ascendant’s downfall; they should have seen it coming years ago.

During the past three and one half years, or ever since Ascendant made landfall in the Intag area, there have been numerous warnings about irregularities, violence, and illegal deals and activities, linked to the company’s Junin copper-molybdenum project. These red flags were published on the Internet and elsewhere during all this time. In addition, DECOIN, one of the many local organizations opposing the project, repeatedly warned the public about possible misleading information put out by the company regarding not only the legality of the concessions, but also contesting fundamental things like the size of Junin’s copper deposit and the nature and extent of the local opposition.

From the very beginning DECOIN denounced publicly the probable illegal nature of the Junin concessions acquired by Ascendant, and the fact that the acquisition violated the community’s constitutional right to be previously consulted. It now turns out that this lack of consultation may be at the heart of Ascendant’s downfall in Ecuador.

When the company started claiming the Junin copper deposit was four times greater than what a Japanese five-year exploration program inferred was there, we denounced it here in Ecuador, and in Canada to different Securities Exchange Commissions (which have failed miserably in protecting Canadian investors). The irregularities we noticed led us to denounce in Canada and on the web, that the work by Micon International, the company that came up with the inflated copper reserve estimate, violated Canadian legislation. In 2007 Micon itself finally announced that, due to improper handling and “termite damage” sustained by the Japanese mineral samples, they were unable to confirm their own earlier higher estimate of the copper deposit. Our organization made sure the BC Securities Commission took note of this serious inconsistency. Yet, not long afterwards, one of Ascendant’s officers, termite damage notwithstanding, publicly announced in a press release that they were sitting on one of the world’s biggest copper deposit.

One of the things our organization went out of its way to denounce was the company’s unrealistic portrayal of the obstacles its Junin project faced on the ground, and especially the character of the local resistance. The company, on the other hand, kept insisting that the opposition came principally, or only, from one organization (DECOIN), and that it was composed of a very small group of “radicals”, or ecoterrorists. However, if anything stands out in the resistance to this project, it’s the amount, determination and diversity of the forces opposed to the Junin project, which includes all local governments, and most communities.

The Failed Environmental Impact Study. In yet another instance of misinformation, when, in late in 2006, the government rejected the company’s Environmental Impact Study, Ascendant reacted by telling its investors that they were “studying” the observations made by the government to their study. That’s a very far cry from being handed an outright rejection.

What Exploration? In its 2006 year-end report, the company claimed it had spent over 3.4 million dollars in exploration activities in Junin. However, no exploration has taken place since 1996; something our organization pointed out in one of our many blogs, and something we made sure the BC Securities Commission knew about. The question remains unanswered: just what did the company spend all that money on? “Security” seems to have been one of those black holes a lot of money went into, and we believe that the ensuing consequences of the misuse of security forces were a major contributing factor to, not only the company’s downfall, but perhaps the downfall of a lot of other Canadian Junior mining companies in Ecuadors, who lost their concessions along with Ascendant’s in January of this year.

The company security plan involved hiring the international firm of Honor and Laurel, a company registered in Colombia, but not Ecuador, thus illegally working in the country. One of Honor and Laurel’s founders comes from British military intelligence background, which has been fertile ground for spawning mercenary armies. The company’s security plan also saw the hiring of several other security firms to supposedly protect employees in the Intag area, but which the locals correctly interpreted as tools for intimidation.

One of the outcomes of the company’s security investments resulted in a paramilitary-like attack against defenseless community members, involving dozens of hired, heavily-armed thugs dressed in private security outfits, who tried to shoot and tear-gas their way past a community roadblock. The whole thing was filmed and photographed in high quality digital media and broadcasted to the world. This so angered the – at the time- industry-friendly government, that it immediately issued the first of many stop-work orders against Ascendant. The abuses by the security thugs were so outrageous that they were denounced internationally by several Human Rights organizations, including CEDHU, Latin America’s most prestigious Human Rights organization. Amnesty International also became involved in investigating and denouncing other instances of intimidations against local opponents to the company’s project, including: a judicial set up to try to imprison one of DECOIN’s member; plus numerous death threats, and an attempted lynching. Global Witness also investigated the intimidating tactics. In other words, the issue became an international one, so that it is nearly impossible for investors not to have heard of the grave incidents linked to the company. Ascendant, on its part, continued to make light of the confrontations like the paramilitary attack, at first saying the thugs were “agricultural consultants”. The company has never apologized to the communities, or to the persons injured or shot in the attack.

Land Trafficking. The investigation by the government’s anti-corruption commission into illegal land trafficking, which eventually led to Ascendant losing 17 of its properties in the Junin area in October of 2007, is another example of gross negligence and underreporting by the company. The purchase of land was a strategic part of the company’s plan to gain access to their concessions and depopulate the area. The company, as far as we can determine, never reported this significant material fact to neither its shareholders, nor to Canadian regulatory authorities.

These are not, by far, all the examples of what we consider to be gross corporate irresponsibility committed by the company (for more examples www.decoin.org) And, it’s not like the information was that difficult to find on the Internet. For example, the electronic magazine, Upside Down World, as well as Counter Punch, Z-magazine, The Dominion, plus the Ottawa Citizen are just some of the many print and electronic publications that have reported on the issues mentioned above.

This does raise the very troubling question as to just how many red flags need to be raised in order for regulatory institutions in Canada to step in, investigate and stop this kind of corporate mayhem. Apparently, in Canada, all these flags were not enough.

And, though the long and disturbing nightmare seems to be finally over in Intag with Ascendant’s departure from this beautiful land, a disturbing aspect still lingers in the air, like a pestilence. And that is, what forces keep governmental regulatory institutions in Canada from preventing this kind of outrageous corporate behavior? And, what can be done to prevent the same thing from happening all over again, either here or somewhere else around the world? The lack of governmental involvement affects not only communities on the ground, but also Canadian investors, who each year lose billions of dollars to unethical corporations (in Ascendant’s case, the shares have lost over 90% of their initial value).

Since 2005, the British Columbian Securities Exchange has received several of our denunciations and official complaints regarding Ascendant Copper Corporation’s irresponsible behavior. We’ve also traveled to Canada and denounced it to the Parliament’s Commission on Foreign Affairs and International Trade. Yet, after more than two years, all we’ve received from the Securities Commissions is empty form letters saying they are investigating and that they are unable release any information. Meanwhile, Canadian mining companies keep going back to the unregulated Great Canadian Stock Exchange Giveaway to fill their bottomless pockets, so they can continue to fund widespread social and environmental havoc overseas.

But the Toronto Stock Exchange is not the only source of funding for companies the likes of Ascendant. Another is “strategic” partnership with so-called reputable companies- companies that remain on the sideline as others do their dirty work for them. In 2006 Rio Tinto Zinc signed a deal with Ascendant knowing of the very serious environmental issues, and manifold social conflicts and legal challenges facing the project and the company. After the paramilitary attacks, and other outrageous denunciations of grave human rights abuses taking place at Ascendant’s JUNIN concessions, Rio Tinto, who considers itself to be a socially responsible corporation, did not terminate the contract with Ascendant; perfectly highlighting the hypocrisy behind the social responsible corporate world.

We are certain that Ascendant Copper Corporation is gone for good from the Intag area and that they’ve lost the Junin mining project. But unless major changes take place where, and how the companies get their funding, we won’t rest.

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By Carlos Zorrilla, January 29, 2008

More Concession on the Chopping Block
Espaniol abajo…

Published in El Univeso Newspaper (Ecuador’s largest daily)

Monday January 28th, 2008

Mandate will revoke mineral concessions
QUITO

A decision by the National Constituent Assembly will broaden the
government’s resolution to revoke 587 mining concessions. The mining
industry association rejects the mandate and warns of a possible work
stoppage.

The government has drafted a new mandate to declare all mining
concessions null. Last week 587 mining concessions were revoked of a
total of 4,112 registered with the Ministry of Mines and Petroleum.

The document was delivered to assembly members of Alianza Pais
(“Country Alliance,” the official movement of President Rafael Correa)
this past Friday indicating that concessions held by companies in the
phase of exploration will be shelved if they haven’t made any
investment before December 31st, 2007.

Also included are concessions for which conservation patents have not
been paid by March 31st for the years 2004, 2005, 2006 and 2007, as
well as those located within protected areas.

The mandate, prepared by the Ministry of Mines and Petroleum, puts a
timeline of one year on renegotiation of concessions. If in this time
an agreement is not reached with mining companies, mineral rights will
be cancelled permanently. During this period, new concessions will not
be granted and pending requests will be postponed.

Details
Reaction

Industry
President of the Chamber of Mining, César Espinosa, indicated that
this mandate puts the mining industry in stalemate and that its
content affects sector investments.

Work Stoppage
The association representative announced that the sector could decide
upon a work stoppage as a means of rejecting the mandate proposed by
the government.

Government proposal suggests canceling concessions in which no
investment has been made.

The 587 mining concessions revoked by the Ministry of Mines and
Petroleum of a total of 4,112 was only a precursor for the outcomes of
the mining mandate, drafted by the government to regulate and declare
the cancellation of all mining concessions.

The draft document, delivered last Friday to assembly members who are
part of the official Country Alliance movement by the Undersecretary
of Mines, José Serrano, states that mining concessions in the phase of
exploration that have not seen any investment before December 31st of
last year will be shelved.

Also included in this group are those affected by the administration’s
decision; those for which conservation patents have not been paid by
March 31st for one or more years during the years 2004, 2005, 2006 and
2007; as well as those located in protected areas.

In article 4 it directs the Ministry Mines and Petroleum to begin a
process of negotiation over remaining mineral rights under new rules
to include royalties; environmental, technical, and economic controls;
determination of a referential price; and terms and sanctions in case
the agreement is breached.

The same Secretariat of the State will draw up guidelines for this process.

The forementioned elements are not found within the current Mining Law
or in the Law for the Promotion of Investment and Citizen
Participation (“Trole 2,” approved in August 2000), in which mining
company obligations are based upon conservation patent payments and
production.

The former establishes the obligation to pay from $1 to $16 annually
per hectare according to the number of years of operation, and the
latter obliges payment of $16 annually.

The mandate, drafted by the Ministry of Mines and Petroleum, places a
one year limit on renegotiation and if an agreement with mining
companies is not reached in this time the cancellation of mining
rights will be permanent.

During this period, new concessions will not be granted and pending
requests will be postponed.

President of the Assembly, Alberto Acosta, had previously indicated in
an interview with El Universo that they were expecting the mining
mandate because there is “a hemorrhage of mining concessions for which
the State does not receive royalties.”

President Rafael Correa in his report to the nation also pointed out
that they are preparing a new Mining Law, which will establish a State
Mining Corporation and that concessions will be suspended until the
new law is written up.

Aware of the government’s intentions to create a new legal framework
for the activity, the Popular Democratic Movement (MPD) and Pachakutik
presented their proposals for the mining mandate to the Secretary of
the Assembly.

The MPD proposal suggests that the country be declared free of
large-scale open pit mining; designating natural sources of water as
untouchable, protected areas in which all types of extractive activity
should be prohibited; that all mining and water concessions be
returned to the state, among other aspects.

Assembly member César Grefa speaking for Pachakutik says that large
scale mining concessions between 1,000 and 5,000 hectares should be
revoked. According to him, open-pit mining activities should not take
place on lands near towns and communities.

What it is known

“A stab in the back”
President of the Chamber of Mining, César Espinosa, described the
mandate as “a stab in the back,” given that the sector has agreed to
dialogue and that it has been working with the government on the new
Mining Law. He indicated that they had planned eight workshops and
that the second took place last Thursday. Espinosa restated that the
only aim of this mining mandate is to put the industry in stalemate
given that it had already become paralyzed once government intentions
became known and that now, with this decision, that investors will be
affected.

Pressure Tactics
The mining sector, which provides employment for 120,000 people, is
considering a work stoppage, said César Espinosa of the Ecuadorian
Chamber of Mining. The organization provided its reaction to the
cancellation of 587 concessions this past Friday.

Canadian Corporations
The largest mining companies in the country are Ascendant Copper,
Ascendant, Ecuacorriente, Lowell, IamGold, Aurelian Resources,
Nambija, Dynasty Metals, Cornerstone. The majority are Canadian, from
the country considered to have the best technology in the sector.

Visits to Montecristi
Since public hearings with the Assembly began, the Natural Resources
working committee has been visited by the Faculty of Mining and
Petroleum from the Central University, the National Chamber of Mining,
the mining company Ecuacorriente, the Front for the Defense of Nature
and Life, the Youth Network, the Front of Women from El Pangüi
(Province of Zamora Chinchipe) and other organizations.

Statistics: 536.387,58 hectares
The cancellation of 587 mining concessions, declared by the Ministry
of Mines and Petroleum last Friday, affects a total of 536 387.58
hectares in nine provinces of the country.

http://www.eluniverso.com/2008/01/28/0001/8/2BEABE55E76F4055A94ACBF9C7CDBD0B.aspx

http://www.eluniverso.com/2008/01/28/0001/8/2BEABE55E76F4055A94ACBF9C7CDBD0B.aspx

Mandato hara caducar las concesiones mineras

Recursos

GRAFICOS

Noticias Relacionadas

Propuesta con sugerencias para Ley

Enero 28, 2008

QUITO

Con la decision de la Constituyente se ampliara la resolucion tomada de revertir 587 concesiones mineras. El gremio de la mineria anuncia su rechazo al mandato y advierte sobre una posible paralizacion de actividades.

El Gobierno tiene listo un nuevo mandato para declarar la caducidad de todas las concesiones mineras. La semana pasada se revirtieron 587 concesiones mineras, de un total de 4.112 que tiene registradas el Ministerio de Minas y Petroleos.

El documento borrador llego a manos de los asambleistas de PAIS el viernes pasado y seniala que se archivaran las concesiones de las empresas que en fase de exploracion no hayan realizado ninguna inversion al 31 de diciembre del 2007.

Ademas se incluyen las concesiones que no hayan pagado las patentes de conservacion hasta el 31 de marzo de los anios 2004, 2005, 2006 y 2007, y de las que se encuentren en areas protegidas.

El mandato, redactado por el Ministerio de Minas y Petroleos, pone el limite de un anio para la renegociacion de las concesiones y si en este tiempo no llegan a un acuerdo con las mineras la caducidad de los titulos sera definitiva. Mientras tanto, no se otorgaran nuevas concesiones y se archivaran las peticiones pendientes.

Detalles

Reaccion

Industria

El presidente de la Camara de Mineria, Cesar Espinosa, indico que este mandato pone en jaque a la industria minera y su contenido afecta a las inversiones en el sector.

Paralizacion

El representante del gremio anuncio que el sector podria ir a una paralizacion de actividades como medida de rechazo a este mandato propuesto por el regimen.

Regimen entrego propuesta para archivar concesiones que no hayan hecho ninguna inversion.

La reversion de 587 concesiones mineras, de un total de 4.112, por parte del Ministerio de Minas y Petroleos, solo fue un preambulo para lo que regulara el mandato minero elaborado por el Gobierno y que declarara la caducidad de todas la concesiones mineras.

El documento borrador, que fue entregado el viernes pasado a los asambleistas de Acuerdo PAIS por el subsecretario de Minas, Jose Serrano, determina que se archivaran las concesiones de las operadoras mineras que en fase de exploracion no hayan realizado ninguna inversion al 31 de diciembre del anio pasado.

En ese grupo tambien se incluyen las que esten pendientes de resolucion administrativa; de aquellas que no pagaron las patentes de conservacion hasta el 31 de marzo de los anios 2004, 2005, 2006 y 2007, por anio o acumulativo; y de las que se encuentren en areas protegidas.

En el articulo 4 dispone al Ministerio de Minas y Petroleos iniciar un nuevo proceso de negociacion de los titulos mineros con las que se salven de ser cernidas, pero bajo nuevas reglas que incluyen regalias, controles ambientales, tecnicos, economicos, precio referencial, plazos y sanciones de incumplimiento.

Todo este proceso requerira de un instructivo que debera ser redactado por la misma Secretaria de Estado.

Los aspectos antes mencionados no estan contemplados en la Ley Minera o de la Promocion de la Inversion y la Participacion Ciudadana (Trole 2, aprobada en agosto del 2000), en la que la obligacion de las mineras se centra en el pago de las patentes de conservacion y de produccion.

En la primera se establece la obligatoriedad de cancelar un valor de 1 a 16 dolares anuales por hectarea minera, dependiendo de los anios de funcionamiento, y en la segunda determina la obligacion del pago de 16 dolares anuales.

El mandato, redactado por el Ministerio de Minas y Petroleos, pone el limite de un anio para la renegociacion, si en este tiempo no llegan a un acuerdo con las mineras la caducidad de los titulos es definitiva.

Mientras tanto, no se otorgaran nuevas concesiones y se archivaran las peticiones pendientes.

La llegada de este mandato fue alertada por el presidente de la Asamblea, Alberto Acosta, quien en una entrevista con este Diario indico que habra un mandato minero porque existe “una hemorragia de concesiones mineras de las que el Estado no tiene regalias”.

Asimismo, el presidente Rafael Correa, en su informe a la nacion, dijo que se esta preparando la nueva Ley Minera, que se creara la Corporacion Estatal Minera y que se suspenderan las concesiones hasta que se redacte la nueva ley.

Conocedores de las intenciones del regimen de darle un nuevo marco a la actividad minera, el Movimiento Popular Democratico y Pachakutik presentaron sus propuestas de mandatos mineros ante la secretaria de la Asamblea.

El MPD sugiere declarar al pais libre de la explotacion minera a gran escala y a cielo abierto; senialar como zonas intangibles y zonas de proteccion las reservas naturales de agua y prohibir a perpetuidad cualquier actividad extractiva; que se reviertan al Estado todas las concesiones mineras y de agua, entre otros aspectos.

Pachakutik, por medio de su asambleista Cesar Grefa, sostiene que deben caducar las concesiones mineras de gran escala que se realicen de 1.000 a 5.000 hectareas. Para el, la actividad minera no se podra realizar de manera abierta, en terrenos cercanos a pueblos y comunidades.

Lo que se sabe

‘Punialada por la espalda’

El presidente de la Camara de Mineria, Cesar Espinosa, califico al mandato como “una punialada por la espalda”, puesto que todo el sector aposto por el dialogo y se sento a trabajar con el Gobierno la nueva Ley Minera. Indico que estaban planificados ocho talleres y que el segundo se llevo a cabo el pasado jueves. Espinosa resalto que la sola intencion de este mandato minero pone en jaque a esta industria porque ya se habia paralizado hasta saber el rumbo que le daria el regimen, y ahora, con esta decision, afectara a los inversionistas.

Medida de hecho

El sector minero, que da empleo a 120.000 personas, analiza iniciar una paralizacion, dijo Cesar Espinosa, de la Camara de Mineria del Ecuador. El viernes pasado, el organismo mostro su reaccion a la caducidad de 587 concesiones.

Empresas de Canada

Las mineras mas grandes en el pais son Ascendant Cooper, Ascendant, Ecuacorriente, Lowell, IamGold, Aurelian Resources, Nambija, Dynasty Metals, Cornerstone. La mayoria son de origen canadiense, pais al que se lo considera con la mayor tecnologia en esta area.

Visitas a Montecristi

Desde que se iniciaron las audiencias en la Asamblea, la mesa de Recursos Naturales ha sido visitada por la Facultad de Mineria y Petroleo de la Universidad Central, la Camara Nacional de Mineral, la empresa de extraccion minera Ecuacorriente, el Frente en Defensa de la Naturaleza y la Vida, la Red de Juventudes, el Frente de Mujeres del Pangüi (Zamora Chinchipe) y otras organizaciones.

Cifras

536.387,58

Hectareas. La caducidad de las 587 concesiones mineras, que determino el Ministerio de Minas y Petroleos el viernes pasado, suma un total de 536.387,58 hectareas, en nueve provincias del pais.

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By Carlos Zorrilla, January 26, 2008

AS THE MINISTRY HAS SAID, THE REVISION OF THE CONCESSIONS WILL CONTINUE AND WILL PROBABLY RESULT IN HUNDREDS OF OTHER CONCESSIONS REVERTING BACK TO THE STATE!!

Ecuador revokes hundreds of mine concessions

• Reuters
• Friday January 25 2008
• http://www.guardian.co.uk/feedarticle?id=7257064

(Adds deputy mining minister’s comments and details, paragraphs 11-19)

By Alonso Soto and Alexandra Valencia

QUITO, Jan 25 (Reuters) – Ecuador’s leftist government revoked hundreds of mining concessions on Friday, highlighting its determination to boost control over the Andean nation’s natural resources.

Shares of Canada’s junior mining company Ascendant Copper plunged 28 percent in Toronto after it lost a high-profile project. But the measure had little effect on some of the biggest players in the sector.

Mining and Petroleum Minister Galo Chiriboga told reporters the state was revoking 587 mining contracts because companies failed to pay fees on concessions for reserves of copper, gold and other metals.

“Based on legal norms, (the government) decided to revoke these contracts,” he said.

Ascendant, which lost its Junin project, accused the government of President Rafael Correa of bowing to pressure from environmental groups.

“None of this is true … the government was rushed into this,” John Haigh, Ascendant’s investor relations chief, said in a telephone interview.

Ecuador has little precious metal output, but dozens of foreign companies are exploring in the sector where nearly 4,000 concessions have been awarded.

By scrapping concessions, Correa sent a signal to the private sector that he wanted to overhaul rules for the industry. But the ally of Venezuelan’s leftist President Hugo Chavez also avoided a battle with the most important foreign investors who generate revenue for the impoverished nation.

Last year, Correa moved more aggressively against foreign oil companies, ordering them to hand over almost all of their windfall profits from high prices.

Since then, Correa has shown signs of moderating his radical policies as his popularity ratings have fallen mainly due to perceptions he is too confrontational.

CORREA RULES

Ecuador’s Deputy Mining Minister Jose Serrano later told Reuters that Friday’s move was “not an action against mining but a move to put the sector in order.”

He warned that the government could revoke more concessions later this year as part of an ongoing probe.

Those concessions will be later auctioned, but he denied speculation that revoked concessions will be later awarded to a planned state mining company.

Serrano said the move would not affect the country’s biggest companies, which include Canadian miners Aurelian Resources, Corriente Resources and Iamgold Corp.

In the case of Ascendant, the government had already limited the company’s work. Last year, it ordered the company to halt the Junin project’s operations on charges it had violated mining regulations.

Serrano said Ascendant can appeal the order.

Friday’s announcement should help appease environmentalists and residents across southern Ecuador, where most of the mining concessions are located. They have lobbied Correa to increase control over mining concessions following complaints the state was indiscriminately handing out contracts in previous years.

The government has already started negotiations with Aurelian and Corriente on their terms for doing business in Ecuador and boost state participation in current deals.

In general, it wants to rewrite rules for the industry by introducing royalties, making it more difficult to grant concessions and setting a windfall tax that should ensure more state revenue. (Writing by Saul Hudson; Editing by David Gregorio)

FIN DE ASCENDANT EN INTAG:
ES IMPORTANT SEÑALAR QUE ESTE ES SOLO EL PRIMER PASO DE LA REVISIÓN DE LAS CONCESIONES EN EL PAÍS (cz)

http://www.lahora.com.ec/frontEnd/main.php?idSeccion=673537
La reversión de 587 concesiones mineras anunció ayer el ministro de Minas y Petróleos, Galo Chiriboga, quien explicó que esta decisión se dio debido a la falta de pago de patentes de conservación, como lo establece la Ley de Minería y el Reglamento General Sustitutivo del Reglamento General de la Ley de Minería.

“No es una acción contra la minería”, dijo Chiriboga e indicó que la reversión de esas concesiones suman un total de 536.387,58 hectáreas.

Dijo que el Ministerio de Minas y Petróleos remitirá a la Contraloría los expedientes de aquellas concesiones que no pagaron sus patentes para que abra los respectivos juicios coactivos.

El ministro explicó que éste es un primer informe respecto a la caducidad de las concesiones y adelantó que el proceso de revisión continuará y en los próximos días se incorporarán nuevas concesiones mineras que serán caducadas en cumplimiento a lo establecido en la Ley de Minería actual.

Además, expresó que se revirtió las concesiones Golden 1 y Golden 2, ubicadas en Íntag y cuyo propietario era la compañía.

Ascendant Copper, debido a que las mismas fueron otorgadas al amparo del artículo 7 de una de las leyes “trole”, que determinaba que la concesión minera era un derecho real; es decir, como tener un bien inmueble, una casa o un terreno.

Esto, a criterio de Chiriboga, ha generado un manejo dispendioso de las concesiones mineras. “Una sola persona tiene cien concesiones”, aseveró.

El titular de la cartera de Minas y Petróleos aseguró que las notificaciones de las caducidades fueron ya notificadas a los concesionarios.