Govt to propose new mining law this month - Ecuador
Published: Thursday, January 3, 2008 16:15 (GMT -0400)

Ecuador's government will bring a mining law reform before the nation's constituent assembly this month with the aim of gaining a larger share of royalties for the state, local press reported.

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The current law demands a payment of US$1-16 for each hectare that has been awarded in a concession, increasing to US$16 once mining begins, the reports said.

But Ecuador's oil and mines minister Galo Chiriboga stressed that gold miners cannot be taxed the same amount as limestone miners. "It is necessary to differentiate between them. The profits are different from one miner to the next," he was quoted as saying.

In its proposal, the government will also push to simplify licensing for concessions, create a stratified patenting system and penalize illegal mining, the reports said.

Representatives from the lower house of congress will meet with the government this week to reach an agreement about the changes and propose the new law, which will be sent to President Rafael Correa and then the constituent assembly.

The recently formed constituent assembly is in charge of reviewing all active mining concessions and may draw up a new mining code, among other things.

The assembly approved a 70% windfall tax last week that analysts believe will severely affect the margins of mining companies working in the country.

By Business News Americas staff reporters