WorldWide Tech & Science. Francisco De Jesùs.
Canadian miner Kinross Gold Corp expects to sign a contract in Ecuador.
Canadian miner Kinross Gold Corp expects to sign a contract in two months of operation for the project Fruta del Norte gold, after Ecuador undertook to amend the mining law, an executive said Thursday the company.
The company, listed in Toronto, signed a preliminary agreement with the Andean nation in December, but then asked for a renegotiation in an attempt to obtain better financial terms related to taxes and royalties.
"We have worked hard in recent weeks and hopefully reach an agreement," said Vice President of Kinross, Eduardo Flores, told Reuters, adding that he expects to sign the contract within two months.
The executive also said that the Government is committed to make changes to the country's Mining Act, which would obtain greater benefits from the project Kinross.
"The windfall tax should not apply as the company can not recover the capital investment. That's not part of the law, but according to preliminary discussions we have had, the Government would accept that," said Flores, in the part of a mining conference in Quito.
"The government wants to take a 70 percent windfall profits above a base price and for us that is completely unacceptable," said Flores.
The executive also said the government recently said he would like to become a member of the project and that the parties have been holding preliminary talks on the matter.
Ecuador does not have a significant mining industry, but President Rafael Correa left, an economist trained in the United States is trying to attract investment to exploit large deposits of copper, gold and silver, and to diversify its economy dependent on exports of oil.
However, Correa is seeking high profits of the mining and Kinross negotiations have taken much longer than originally planned.
"The profitability of this project would almost double if you were in Chile (...) but the gold is here," said Flores.
Correa signed in March, the first major mining contract with the China-owned firm Ecuacorriente to invest 1,400 billion in the Mirador copper project.
The government has said that agreements with Ecuacorriente and Kinross will be a model for future contracts that would allow Ecuador to develop its mining sector.