This economic model is not attractive for Kinross because “the average production cost is US$800 per ounce [of gold].” If the average sale price is US$1,600 an ounce, “the profit margin will fluctuate between US$300 and US$400 and if half of this goes to the government, the equation does not work,” he said.

Maybe it was never meant to work? I'm probably giving more credit than due, but perhaps the idea was to scare off western capital (a la Venezuela & Bolivia) in the knowledge that a ready (and steady) customer who could bear the cost was waiting in the wings?

Talking about China of course. It can't have escaped notice the kind of money they're throwing around in Africa, sprucing up the place, buying new friends, etc. Ecuador has everything they need to trade with China on their terms, which historically hasn't been true with western capital. How many times has the US intervened in Latin America? How many times has China?

Of course this all hinges on China not falling apart, and you no doubt limit yourself dealing with a single big partner, but hey... western capital will seek out profit where ever it can be found, so if the China play doesn't pan out, simply change the rules (again) and just like Arnie, they'll be back!

ebear