The government of Ecuador is preparing to create its first state-owned mining company, National Mining Corp. This move follows the adoption of new mining legislation in January this year.
According to a report in Latino Minería News, the recent changes are intended to modernize the industry in order to take advantage of the country's mineral wealth while applying modern industrial standards. Much of the mining currently taking place in Ecuador is small-scale, artisanal workings.
Ecuador is not a mining powerhouse. It makes little of its mineral potential except for its petroleum resources. Oil and gas revenues make up over half its export earnings and a quart of its public sector revenues. The largest miners are Swiss and French cement companies.
The new legislation and state-owned company are intended to give the metal exploration and mining sector a significantly higher profile. Currently there are just a handful of gold mines operated by North American companies and four more projects in the advanced exploration state.
If the Ecuadorian government is correct, the metal mining potential of that country could be US$110 trillion. That's a number that may well attract a number of global investors. The new, modern mining law and a commitment by the government to its own mining company are steps in the right direction.