ECUADOR Law and Practice Contributed by: Roque Bernardo Bustamante and Claudia Bustamante, Flor Bustamante Pizarro & Hurtado
• initial exploration, 2.5%, equivalent to USD11.75 per mining hectare; • advanced exploration and economic evaluation, 5%, equivalent to USD23.5 per mining hectare; and • exploitation, 10%, equivalent to USD 47 per mining hectare. In June 2025, the Mining Regulation and Control Agency passed a Resolution imposing additional min - ing maintenance fees. As per this Resolution, different percentages are applicable depending on the mining regime, as set out below. Small-scale mining: • exploration – 15% of the minimum wage, equiva - lent to USD70.5 per mining hectare; and • exploitation – 25% of the minimum wage, equiva - lent to USD117.5, per mining hectare. Medium-scale mining: • initial exploration – 30% of the minimum wage, equivalent to USD141, per mining hectare; • advanced exploration – 40% of the minimum wage, equivalent to USD188, per mining hectare; • economic evaluation – 20% of the minimum wage, equivalent to USD94, per mining hectare; and • exploitation – 50% of the minimum wage, equiva - lent to USD235, per mining hectare. Large-scale mining: • initial exploration – 25% of the minimum wage, equivalent to USD117.5, per mining hectare; • advanced exploration – 75% of the minimum wage, equivalent to USD352.5, per mining hectare; • economic evaluation – 25% of the minimum wage, equivalent to USD117.5, per mining hectare; and • exploitation – 100% of the minimum wage, equiva - lent to USD470, per mining hectare. The benefits of the project are understood to be the revenues from the sales of minerals, minus amortisa- tion of investments, operating costs and all pertinent taxes, government royalties and profit-sharing. The benefit to the company must be lower than the ben -
efit to the State that is formed by all taxes and roy - alties paid by the company in the same fiscal year. An adjustable formula called the “ ajuste soberano ” is incorporated into the contracts to ensure that the benefits to the State remain higher than the benefits to the operating company throughout. If a project is considered to be large-scale before it has entered into the exploitation stage, the conces - sion holder must execute a contract with the State of Ecuador where minimum investments on the project and future royalties are set up. Termination and Transfer of Rights The State of Ecuador may declare unilateral termi - nation of a mining concession if the company has breached certain provisions of the law, including non-payment of annual per-hectare maintenance fees or royalties, not meeting minimum commitment investments, employment of children, material envi - ronmental damage duly proven through the Ministry of Environment and pertinent courts, and transference of mining rights without prior approval of the ministry. Unilateral termination is conducted through a process where the company has the right to defend itself and, if possible, correct – and compensate for – the fault that led to the unilateral termination. Mining rights are transferable, provided prior approval is granted by the Ministry of Energy and Mines. For the transfer process, a request must be submitted to the Ministry specifying the percentage of the area to be transferred and attaching supporting documents. If the documentation is complete, the Ministry will request ARCOM to issue three reports: legal, techni - cal and economic. With these ARCOM reports, the Ministry will issue a resolution approving the transfer of concessions. This resolution must be registered in the Mining Registry under the charge of ARCOM. Sub - sequently, a Public Deed must be executed between the assignor and the assignee, attaching the regis - tered approving resolution. At the end of the process, the Public Deed must also be registered in the Mining Registry under the charge of ARCOM.
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