Canadian miner Lundin Gold Inc (LUG.TO) inaugurated its Fruta del Norte gold mine in the Ecuadorean Amazon on Thursday, as market-friendly President Lenin Moreno seeks to attract mining investment to diversify the stagnant oil-dependent economy.
The mine, whose proven reserves include some 4.8 million ounces of gold and 6.3 million ounces of silver, is expected to produce some 310,000 ounces of gold and 400,000 ounces of silver during its 15-year life span. It is expected to involve some $2.7 billion in investment, Ecuadorean government data show.
The Andean country, which borders the world’s No. 2 copper producer Peru but is just starting to develop its own vast mineral resources, in July inaugurated its first large-scale copper mine, the Mirador project owned by Chinese consortium CRCC-Tongguan.
Moreno, seeking to spur growth and close the OPEC member’s fiscal deficit, has eliminated a windfall tax on miners to try to court investment from the sector.
His push has faced obstacles from communities concerned about mining’s environmental impact and from wildcat miners reluctant to cede informal operations to formal concessions.
Ecuador also experienced its worst political violence in decades last month as widespread protests against Moreno’s austerity measures paralyzed the capital Quito. Mirador temporarily limited operations to protect its workers.
Lundin Gold is expected to pay some $1 billion in taxes during the mine’s 15-year lifespan, company president Ron Hochstein said at the mine’s inauguration.