<<UPDATE 2-Ecuador's Correa backs large-scale mining freeze
2008/04/17 12:06:39 (GMT-04:00)
Provided by: Reuters News
(Recasts, adds Correa's comments, details)
By Alonso Soto
QUITO, April 17 (Reuters) - Ecuadorean President Rafael Correa said on Thursday he backs suspending large-scale mining exploration projects while a new mining law is approved to regulate the country's nascent industry.
Correa, who has sought to tighten state control over Ecuador's natural resources, said a new mining law is expected to be approved in six months. A special assembly rewriting the constitution is expected to pass a decree on Friday to suspend mining activity in medium and large-scale exploration projects.
"Some concessions where there has been investment and exploration and that were about to enter the exploitation phase will be suspended for 180 days until there is a new legal framework," Correa told foreign reporters in Quito. "And we will write new (mining) contracts based on that legal framework."
The constitutional assembly is working to overhaul the mining sector, which is fueling investor concerns over whether Correa will seek more control over mining operations as his ally, Venezuelan President Hugo Chavez, has done with the oil sector.
It was unclear which exploration projects would be affected or when the suspension would begin.
Correa said he supports large mining projects that will benefit his poor nation with billions of dollars in revenues, but said companies will have to comply with stricter controls.
The 130-member assembly, controlled by Correa's Alianza Pais party, plans to vote on the decree that will also revoke concessions owned companies that have not invested until late 2007 or have failed to pay their government fees.
Ecuador lacks significant output of precious metals, but dozens of Canadian companies such as Aurelian Resources <ARU.TO> and Corriente Resources <CTQ.TO> are exploring for gold and copper.
Correa also said foreign oil companies working in Ecuador had shown interest in negotiating a switch to new deals which will make them contractors with the government, instead of joint-venture partners as in the past. Talks over the contracts are still ongoing.
(Reporting by Alonso Soto in Quito, ; Editing by Marguerita Choy)
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