Ecuador's energy ministry wrapped up talks and expects to reach a final deal by January with a subsidiary of Canada's Lumina Gold to develop the large-scale Cangrejos copper project, mining vice-minister vice-minister Rebeca Illescas said.
Odin Mining Ecuador wants to develop the project in El Oro province, in southeast Ecuador, that holds probable copper reserves of about 635,000 metric tonnes (t) of copper.
Interim energy minister Inez Manzano said the government plans to sign the production contract with Lumina in January, although both parties could take until May 2025 to complete the deal under the recently agreed terms.
The company plans to invest around $1.3bn in building the open pit mine, with plans to start construction by the end of 2025 and production by 2029.
According to Illescas, the company committed to pay $25mn in anticipated royalties that will be delivered from 2025-2027 after the contract is signed and during the first two years of the construction of the mine.
She added that Lumina Gold also committed to installing up to 60MW of new thermoelectric or renewable power to produce the electricity the project consumes and not depend on the national grid. The firm will pay 5-8pc in royalties to the Ecuadorian government depending on the international price of copper, said Illescas. The contract will last 30 years, and should generate around $5.2bn in income from taxes, she said.
The company is working on the feasibility study that will be ready by the second half of 2025, Lumina Gold senior vice-president Diego Benalcazar said.
Ecuador's copper concentrate exports generated revenues for about $984mn from January-September 2024, down by 10pc compared with the same period in 2023, according to the central bank. It was Ecuador's fifth-largest export. In 2023, copper concentrate was the fourth-largest export.
