Overview
The Ecuadorian mining sector - though currently hampered by ongoing social tensions, security challenges, illegal mining operations, and judicial and regulatory obstacles to legal mining - is one of the top growth prospects for the near- and medium-term. Ecuador enjoys excellent mineral resources on par with its neighbors Peru, Colombia, and Chile. Ecuador’s most valuable mineral exports are gold, copper, and silver. Ecuador’s mining sector exceeded prior year annual export revenues in 2022, with export revenues increasing 33 percent in mining. Prospective mining industry investors await a plan from the new Ecuadorian government to resolve the many socio-political and investment climate challenges creating uncertainty in the industry.
The mining sector created 180,000 jobs and contributed $590 million in taxes and royalties to the Ecuadorian government in 2022. Analysts forecast that mining could become the third biggest export by 2025 generating over $4 billion in annual export revenues and comprising 15 percent of exports, displacing bananas as Ecuador’s third biggest export. Ecuador has two operating large-scale mines — a gold mine operated by a Canadian company with U.S. investment and a copper mine operated by a PRC-affiliated company. In 2022, the government did not issue any new mining concessions.
However, Ecuador closed its mining cadastre in 2018 and currently has no plans to reopen it. Energy Ministry officials had planned to announce a phased reopening of the cadastre in 2023 beginning with opening new concessions in non-conflict areas, followed by processing the backlog of over 200 concession applications dating back to 2018. In July 2023, a solution to a closed cadastre arose when national mining company ENAMI EP issued a regulation for entering into commercial agreements with private companies. This regulation allows potential business partners of ENAMI EP to develop mining projects with the subsequent assignment and transfer of rights over mining concessions. Even with a closed cadastre, ENAMI EP can still request mining concessions.
The June 2022 nationwide Indigenous-led protests targeted mining, in addition to other key sectors and policies. Protesters shut down several mining operations demanding the government conduct constitutionally mandated community consultations prior to granting new concessions. Following a 90-day dialogue with Indigenous communities, the Ecuadorian government conceded to a 12-month moratorium on granting additional mining concessions pending passage of a community consultation law. Ecuador’s Constitutional Court affirmed communities have the right to vote on whether to allow large-scale mining projects near their water sources in a September 2020 ruling on a plebiscite proposed by the Cuenca municipality.
Illegal mining continues to be a principal threat to expanding legal mining operations and investment. Illegal miners undertook violent attacks on legal mining concessions throughout Ecuador in 2023, and the Ecuadorian government lacks sufficient security resources and funding to protect legal mining concessions and effectively go after illegal mining. Companies may need to invest in private security resources and may face legal challenges to their claims in the Ecuadorian judicial system. Former President Lasso declared illegal mining a national security threat in January 2023, as transnational criminal organizations increasingly exploited Ecuador’s gold resources. The declaration paved a path for military and police interventions to protect mining sites. Illegal mining hotspots are concentrated in six Ecuadorian provinces – Azuay, Morona Santiago, El Oro (Zaruma-Portovelo), Zamora Chinchipe, Imbabura, and Esmeraldas. The new Noboa administration also has made combating illegal mining a priority.
Sub-Sector Best Prospects
- Mineral exploration including geophysics, mapping, and tunneling equipment
- Production equipment for drilling, extraction, loading, hauling, and crushing
- Mining software for resource estimation, modeling, mine design, and optimization
- Mine safety equipment
Opportunities
Mining broke records as Ecuador’s fastest growing sector by GDP in 2022. Ecuador’s mining exports generated $2.8 billion in 2022, a 33 percent increase over 2021 mining exports ($2.1 billion), according to Energy and Mines Ministry (MEM) statistics. Higher gold and copper prices combined with increased year-on-year production boosted the mining sector’s economic performance.
Web Resources
- Ministry of Energy and Mines (MEM): https://www.recursosyenergia.gob.ec/
- Ecuadorian National Mining Company (Enami EP): https://www.enamiep.gob.ec/
- Geological and Research Institute in Ecuador (IIGE): https://www.geoenergia.gob.ec/
- Agency for the Regulation and Control of Energy and Non-Renewable Natural Resources (ARCERNNR): https://www.controlrecursosyenergia.gob.ec/
- Ecuadorian Ministry of Environment, Water and Ecological Transition Environment: https://www.ambiente.gob.ec/
- Ecuadorian Chamber of Mines: https://cme.org.ec
Table 1: GDP for oil and mines in Ecuador
| GDP - US $ million | 2020 | 2021 | 2022 | 2023 estimated |
| Oil and mines | 2,923 | 4,194 | 5,421 |
Source: Central Bank of Ecuador
Table 2: Oil, non-oil and mining exports in Ecuador
| US $ million | 2020 | 2021 | 2022 | 2023 estimated |
| Total Exports | 20,355 | 26,699 | 32,658 | |
| Non-oil Exports | 15,105 | 18,092 | 21,071 | |
| Oil Exports | 5,250 | 8,607 | 11,587 | |
| Mining exports | 2,091 | 2,775 | ||
| Lead and Copper Concentrate | 921 | 1,288 | ||
| Gold | 573 | 828 | ||
| Other Mining Products | 598 | 659 | ||
| % of mining exports in total exports | 7.83% | 8.50% |
Source: Central Bank of Ecuador