Do you think the way Empresa Nacional Minera (ENAMI EP) approaches mining in Ecuador is different to the way private sector companies do?
Definitely, yes. ENAMI EP, as a public company, has two big duties. The first is to produce income for the government, and the other is to provide wealth to the communities. A private company does not have as much of a social focus. One important part of ENAMI EP's activities is to provide communities with all the requirements needed to maintain artisanal mining. We have two social projects in the country. ENAMI EP also has partnerships with associations to reduce the use of mercury.
Ecuador has a lot of mining potential, but the country has struggled to get the mining industry to play the role in the economy that it could. Why do you think this is?
Probably because the economy has been based on oil for the past 40 or 50 years. It was a mistake to focus solely on this sector. Of course, this sector provides the country with a lot of wealth. However, this sole focus is the reason for the country's problems at the moment. The mining activity in this country cannot just be about finding these resources and selling them. It has to be a process that provides the country with the possibility of adding value, diversifying sectors, and contributing to communities. This is the main reason for the change in the productive matrix.
What role can the mining sector play in changing the productive matrix?
It is important that the mining sector plays a role in this change, because we need to be responsible to the people of this country. We need to show that the country can do more than find minerals. We need to create new processes and industries. Mining activity creates more decentralization, because you invest a lot of funds into communities. Especially in the mining sector, food, transportation, goods, and housing are required, which then contributes to the overall economy. Due to the nature of the mining sector, it can also contribute to rural development. The sector also provides a lot of work for people. The sector needs to learn about new technologies, which then provide income for the government and the communities with part of the royalties. The mining law of Ecuador says the government needs to reinvest at least 60% of mining royalties into communities. Oil companies are used to producing substantial volumes of oil, and investing generated revenue solely in the capital, Quito.
Do you think the reforms made to mining legislation in 2013 enhanced the abilities of the country to attract FDI?
Ecuador, as a new mining country, is trying to understand how the mining sector operates here. And during this process, some mistakes have been made. However, the government has done its research and understands how it operates in the world and in the country. Some important changes are coming, because the government knows mining is a high-risk activity. Exploration also needs to be better supported, and the government is working on this.
Is Ecuador now an attractive destination for international mining companies?
Yes definitely, because of the country's considerable potential. The grade of minerals in Ecuador is interesting, the cost is low, and the country is competitive in the mining arena. The country has political stability, and the most important thing is that our President is greatly supportive of this industry, which shows in the highway, water, and electricity infrastructure. This may be contrasted with to a country like Chile, where one has to pump water from the ocean into mining projects. The government is preparing for this industrial era by building roads, ports, airports, and hydropower plants, all of which are attractive to investors.