Ecuador has announced that it has set a goal of US$2.8 billion in mining exports in 2022, a massive 34% increase over 2021. The country is a major producer of copper, gold, and silver. However, as the world focuses on trying to stabilize a copper market in which a supply and demand imbalance will inevitably push prices higher, this will be a focus for companies in the country.
“By 2030, we will be fighting with oil for first place in exports,” deputy mining minister Andrés Wierdak told at a mining event, according to a press release. Ecuador’s current top exports are oil, bananas and shrimp.”
One of the companies in the middle of Ecuador’s big push for more exports is Solaris Resources (TSX:SLS, OTCQB: SLSSF), a junior copper exploration company with its flagship Warintza Project in southeastern Ecuador. The company released in April 2022 a significant mineral resource estimate for the Warintza Central deposit of 1.5 Bt @ 0.5% CuEq including a robust starter pit of 0.3 Bt @ 0.8% CuEq. Warintza Central is one of four deposits within the Warintza Cluster where three additional discoveries have been made within the last year, all with a similar or larger footprint to Warintza Central offering multi-billion tonnes potential on the property.
Ecuador is a relatively new jurisdiction for mining, but one of the few globally that has a record since opening its mining sector in 2014 of encouraging growth by cutting taxes and royalties. The country has a large number of mineral resources, including copper, gold, silver, zinc, lead, and oil making it an attractive destination for mining companies.
President Lasso has a clear agenda of economic revitalization through private investment with one of the key pillars being the growth of the mining sector. President Lasso’s vision is to see Ecuador become a major mineral exporting country like Chile and Peru through what they are calling the “decade of mining” in the country in order to attract new foreign direct investment.
Copper is needed for the green energy transition, which comprises the installation of solar, wind, and other renewable energy sources. Copper mining companies have emphasized their commitment to sustainable development in their operations and development plans. However, a lack of new projects has industry experts concerned that it will not be enough to keep up with the massive demand surge.
Countries like the United States have also made critical mission statements to transition power grids and build electric vehicle charging station networks cross-country. Those applications require copper for everything from wiring to catalytic converters.
Solaris Resources’ Warintza Project has the potential to deliver a massive win for Ecuador, in terms of establishing its credentials as a premier jurisdiction for new mining investment, particularly in copper. Solaris (and Ecuador) are poised to win big given the emerging copper cycle.
And while various jurisdictions are increasing their government take – including Panama, Chile, Peru, the US and Zambia – Ecuador has bucked the trend with the government trying to kickstart and accelerate the build-out of a major mining sector.