Ecuador does not want to sign a mining deal with Kinross if it means re-negotiating terms, said the Energy Minster, Wilson Pastor. However the Canadian mining company wants to re-negotiate the terms of a tentative agreement for the Fruta del Norte gold project.
The agreement was signed in December last year and said that Kinross would pay royalties between 5% to 8% depending on the price of gold. As per the agreement Kinross would also have to pay the government $65 million as advance royalties in two instalments.
While the Ecuador President Rafael Correa is trying to attract investors to tap the large deposits of copper, gold and silver in the country, he is also trying to maximize government revenue earned from the mining.
The Energy Minster made no secret of the fact that the negotiations with Kinross had been very difficult. He added that there was a possibility that a final contract may not be signed. Fruta del Norte is considered to be the largest deposit of gold in Ecuador and it is situated in the Zamora Chinchipe province.
President Rafael Correa’s administration has had more success with the Chinese company Ecuacorriente which is bidding for the Mirandor copper project. The company Ecuacorriente is actually controlled by the China Railway Construction Corp and the Tongling Nonferrois Metals Group Co. Pastor said that a tentative agreement had been signed last Thursday with Ecuacorriente and they were hoping to have a contract by the last week of February.