Ecuador’s constitutional court allows referendums on new mining projects

Ecuador’s highest court has ruled that communities have the right to hold referendums on whether or not proposed large and medium-scale mines can move forward, but said the public can only vote on mining rights not yet granted and not on licenced projects.

The constitutional court’s decision follows a petition by the government of Cuenca, a city in the country’s highlands, to propose questions to a referendum seeking to ban mining near water sources.

It represents a victory for Cuenca, in the southern province of Azuay, which hosts several projects, including SolGold’s (TSX: SOLG; LSE: SOLG) Sharug project and INV Metals’ (TSXV: INV) Loma Larga gold-silver-copper project.

“It has been a dream for Cuencans for so many years to be allowed, through popular consultation, to determine the future protection of our water sources,” Cuenca Mayor Pedro Palacios told local media.

Participation in the referendum on mining will be mandatory, Palacios added.

INV Metals welcomed the ruling, saying it solidifies its lawful rights. The company noted it was working with the government to review Loma Larga’s environmental impact study to advance it through the permit process.

Processing ore from its proposed underground mine will be done without using cyanide, IVN has said, and about 55% of the tailings will be placed underground using the paste backfill method.

The remaining tailings, the project developer noted, will be filtered and pressed to remove water to be treated and recycled within the processing facilities.

Ecuador has gained ground as a mining investment destination, but opposition to the extraction of the country’s resources could thwart the government’s plan to attract US$3.7 billion in mining investment over the next two years. That’s significantly up from the $270 million it received in 2018.

— This article first appeared in MINING.com, which is part of Glacier Resource Innovation Group.