QUITO (Reuters) -

World copper giants Xstrata Copper and Codelco are eyeing a potential partnership in a major Canadian-owned copper play despite uncertainty over the leftist government's plans for the nascent sector.

Two senior mining ministry officials, who spoke on condition of anonymity, told Reuters that China's Tongling Nonferrous Metals (000630.SZ), Xstrata Copper (XTA.L) and No. 1 copper producer Codelco are interested in Corriente Resources' Panantza-San Carlos project in southern Ecuador.

Corriente (CTQ.TO) and a handful of other foreign exploration companies in Ecuador have been looking for partners after losing millions of dollars in market capital when President Rafael Correa banned mining operations in April while a new mining law was drafted.

Correa, a leftist former economy minister, has said he welcomes foreign miners to develop an industry that could be worth billions of dollars for the poor nation, but his erratic mining policy has kept foreign investors jittery.

The draft of the mining bill made public on Monday calls for tighter state control over the emerging industry, but is not as strict as some analysts have feared.

Top mining official met with the three companies to ease fears on the country's mining future.

"Those three companies have met with us and been briefed on the country's goals in the sector," said one of the senior officials, adding that the companies are part of Corriente's majority partnership marketing process carried out by Citi and CanaccordAdams.

Corriente Senior Vice President Dan Carriere declined to say if the three companies were part of the marketing process, citing confidentiality agreements.

"I can tell you that we are very pleased with the level of interest by multiple groups," Carriere said. "There is currently a group on the field."

Earlier this month Kinross (K.TO) won a C$870 million ($815 million) bid for Aurelian (ARU.TO) and will take control of its Fruta del Norte project in Ecuador, considered by experts to be one of the world's top undeveloped gold deposits.

Growing interest in Ecuador mirrors the mining industry's undeterred appetite for the red metal even if that means dealing with politically unstable nations.

Xstrata Copper, one of the world's biggest copper producers, would not comment on the project directly, but did say it has looked at Ecuador for opportunities.

"We've looked in Ecuador as we've looked in many other countries as part of a business development exercise to see what projects are out there, but we don't have any current plans to develop projects in Ecuador," said Emily Russell, spokeswoman for Xstrata.

A Codelco spokeswomen also declined to comment on the project directly, but said the state-run company is looking at opportunities in several countries including Ecuador.

Tongling could not be reached for comment.

The Panantza-San Carlos project has inferred resources of 14.4 billion pounds of copper and Vancouver-based Corriente says it will cost about $1.3 billion to develop.

A so-called preliminary assessment technical report published on the property in December last year projected average annual metal production over the first 10 years of approximately 418,000,000 pounds of copper (190,000 tonnes), 22,800 oz gold, 1,110,000 oz silver and 2,800,000 pounds (1,270 tonnes) of molybdenum.

All of Corriente's exploration projects have been suspended by the government since late 2006 to prevent violent clashes between communities that oppose or back mining activity in the jungle. (Additional reporting by Pav Jordan in Santiago; Editing by Gary Hill)

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