BlogSin categoríaNaboa sends strong investment message at PDAC

Naboa sends strong investment message at PDAC

Ecuador’s president, Daniel Naboa told delegates at the 2024 Prospectors and Developers Association Conference in Toronto, Canada, of his government’s firm commitment to the development of the mining sector and the many changes he has implemented with the first 100 days of his administration.

“Mining has become one of the most important sectors for Ecuador.  2019 marked the start of the era of industrial mining of industrial and precious metals. In 2025, exports could reach $14.8 billion; I hope that number is higher,” said Naboa. 2019 saw the start of production at the Mirador copper and Fruta del Norte gold mines.

Earlier, mining and energy minister Andrea Arrobo outlined the five pillars the Naboa government is advancing for the mining sector, which include institutional strengthening and the creation of a multi-ministerial task force led by her ministry to review projects to reduce permitting times.

“We value time. We don’t like wasting our time or your time. We are going to be very strict in terms of the environment, but also very quick. You will know very soon if things work or if they don’t work. We need to solve things at a faster pace than before. … We have changed the KPIs (key performance indicators) of our ministries. The main KPI of the Ministry of Environment is now licenses given, not licenses blocked, a huge change,” said Naboa.

Naboa said that one of the main challenges for Ecuador is creating employment opportunities for its young people, the fastest-growing demographic in the country. Lack of opportunity has seen Ecuador’s young be preyed upon by criminal groups and brought insecurity.

The government estimates that mining generates 96,000 direct and indirect jobs, benefitting 377,000 Ecuadorians. To help create opportunities, the government is offering tax breaks to companies that create jobs for youth. “We have over 50% youth unemployment. 40% of the population is aged between 14 and 35. If we don’t give them jobs and education, the whole nation collapses. We have to give them opportunity. There are tax deductions for people and companies that do things right, protect the environment, comply with the law and hire young Ecuadoreans. … We have a pretty straightforward social contract: you help our young people and the government will help you,” said Naboa.

President Naboa also sees the mining sector as a key ally in developing other parts of Ecuador’s economy through a complimentary business model, which encourages private investment in basic infrastructure and public services. “We see complimentary business developments such as mining with energy, mining with water, mining with logistics and mining with energy transmission.

Minister of production, foreign trade, investment and fisheries, Sonsoles García spoke about the government’s actions to improve conditions for foreign direct investment, including the economic efficiency law passed in December 2023 and the energy competition law passed in January. The government is also seeking to reform article 422 of the constitution to allow for international arbitration for private investment.

“We have investment protection agreements that offer tax incentives and promote stability for investments above $100 million,” said Garcia.

Fiscal incentives include a 5% reduction in income tax, exemption from the currency outflow tax, VAT refunds and an exemption on import duties. Ecuador is also negotiating a Free Trade Agreement with Canada.

Security

President Naboa also spoke of the efforts the government has made to turn around a deteriorating security situation, which saw presidential candidate Fernando Villavicencio gunned down in 2023, and a wave of armed violence sweep the country.

“We received a country with over $4.6 billion in delayed payments. Ecuador was cashless, insecure and with complete uncertainty. In the last 100 days, we have given hope to over 18 million Ecuadorians. We tackled corruption. In our first week, we changed the heads of the Armed forces and five of eight police generals because they need to be completely aligned to protect the people of Ecuador and investment,” said Naboa.

The Naboa administration’s efforts have seen Ecuador’s country risk rating fall by 800 points from over 2000 in 60 days. “Our bonds are close to investment grade. With the new tax reforms, our economy is sound, and we have exceeded the best expectations from financial institutions and the IMF,” said Naboa.

Projects

Ecuador has some US$9 billion of development projects in its pipeline, which could help the sector grow to become the country’s third-largest export sector. These include Dundee Precious Metals’ Loma Larga, Adventus Mining’s El Domo, Atico Mining’s La Plata, Solaris Resources’ Warintza, SolGold’s Cascabel and Lumina Gold’s Cangrejos.

“Ecuador’s mining projects represent a promising opportunity for economic development. … We have major players seeking opportunities,” said Carolina Orozco, president of Ecuador’s Mining Chamber.

New concessions

To help the mining sector continue to grow, Minister Arrobo said the government is working to reopen the mining cadastral so that exploration companies can request exploration concessions again. The cadastral has been closed for seven years. “We have bought new mining management software financed by the Inter-American Development Bank, and it is due to open in December 2025,” she said.



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