ECUADOR Law and Practice Contributed by: Roque Bernardo Bustamante and Claudia Bustamante, Flor Bustamante Pizarro & Hurtado
favourable report has previously been obtained from ARCOM and the Ministry of the Environment. The mining concession will be divided into an exploration stage and an exploitation stage. During the explora - tion stage, a distinction will be made between the ini - tial exploration period, the period of advanced explo - ration and the period of integral economic evaluation of the deposit. It will incorporate the main, secondary and other minerals of economic value. Mining holders may suspend activities when the pro - tection of the health and life of mining workers or communities located within a certain distance of the area where mining activity takes place so requires, as provided in the general regulations of the law, when required by the Civil Defence or when non-compli - ance with the environmental licence by the competent environmental authority is verified. In any case, the suspension of mining activities shall be ordered exclu - sively by the Minister of Energy and Mines, by means of a reasoned resolution. A mining concessionaire who is prevented from car - rying out their mining activities normally, due to force majeure or a fortuitous case duly proven, may apply to the Ministry of Energy and Mines for the suspension of the concession term for the period that the impedi - ment lasts. For this purpose, the Ministry of Industry, by means of a reasoned resolution, shall admit or deny any such request. 1.7 Mining: Security of Tenure Grant, Exploration and Exploitation Stages Mining concessions are granted through a competi - tive process where the first applicant has the right to match other offers, except in the case of applications made by ENAMI. Unfortunately, the mining registry and procedure for new applications, called “ Catastro Minero ”, has now been closed for almost eight years and it is impossible to predict when it will be reopened. Therefore, the only possible way to enter now is to partner with an entity that already holds mining rights or with ENAMI. In accordance with the mining law, a mining conces - sion has up to four years for initial exploration, up to four years for advanced exploration, up to two years
(renewable by an additional two years) on economic evaluation and what remains of up to 25 years on exploitation. The exploitation period can be extended for up to another 25 years. Once the initial exploration period or the advanced exploration period, as the case may be, has been completed, the mining concessionaire will have a period of up to two years to carry out the econom - ic evaluation of the deposit and request, before its expiry, the beginning of the exploitation stage and the corresponding subscription of the Mining Exploitation Contract, in the terms indicated in this law. The min - ing concessionaire shall have the right to apply to the Ministry of Energy and Mines for an extension of the period of economic evaluation of the deposit for a period of up to two years from the date of the admin - istrative act accepting that application. In the event that the mining concessionaire does not request the start of the exploitation stage in the terms indicated in the foregoing, the mining concession shall be declared extinguished by the Ministry of the Sector. Within six months from the resolution declaring the beginning of the exploitation stage, the mining con - cessionaire must sign with the State, through the Ministry of Energy and Mines, a Mining Exploitation Contract containing the conditions and terms for the construction and assembly, extraction, transporta - tion and commercialisation stages of the minerals obtained within the limits of the mining concession. The holder of a mining concession may not carry out exploitation work without having previously signed the respective contract. Fees, Royalties and Taxes Maintenance fees per hectare “ patente ” must be paid annually during exploration and exploitation stages, on a scale that is adjusted annually in proportion to the minimum wage of Ecuador (USD470 for the year 2025). For small-scale mining, the patente is equiva - lent to 2% of the minimum wage (USD 11.75 per min - ing hectare). For medium and large-scale mining, the patente shall be paid as follows:
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