ECUADOR Trends and Developments Contributed by: Roque Bernardo Bustamante and Claudia Bustamante, Flor Bustamante Pizarro & Hurtado
• the Final Negotiation Minutes; • an audited technical report of mineral resources and reserves; and • if the area to be exploited exceeds 5,000 hectares, a waiver of the right to exploit the additional hectares, which will be processed separately. These documents ensure that the concession - aire has met all legal and regulatory requirements before transitioning to the exploitation phase. Upon receiving the request, the MEM, within 60 days from the submission date or from the com - pletion of all required documents by the min - ing concessionaire, will issue an administrative resolution declaring the start of the exploitation phase. This resolution will establish the begin - ning of a six-month period during which the min - ing concessionaire must sign the corresponding exploitation contract and register the executed exploitation contract in the Mining Registry with - in 30 days of execution. Content of the exploitation contract The exploitation contract, together with the mining title, will govern and outline the terms, conditions, and timelines for the construction, production, transportation, and commercialisa - tion of minerals obtained within the boundaries of the mining concession. The exploitation contract addresses several
nical criteria, considering the time required for construction and the mine’s operational lifespan. In our opinion, this aspect should align with the duration of the mining title. As previously men - tioned, the concession is granted for 25 years, and by the time the exploitation phase begins – after constructing the mine and obtaining all necessary environmental permits – approxi - mately ten years remain for production activities. Based on the experience of most projects, this timeframe is often insufficient. While the Mining Law states that the State can extend the con - cession, in practice, the renewal process has proven to be challenging and on occasion, the State has requested (in our opinion) further req - uisites for the renewal than those provided in the Law and regulations, such as the discovery of new reserves. It is therefore advisable to secure and renew the duration of the mining title before signing the exploitation contract. Once in the exploitation phase, renewing the concession can become more complex, and the State may seek to rene - gotiate the terms. It is crucial to establish a clear contract duration that reflects the realities of the project’s life. Additionally, the exploitation contract should be considered accessory to the mining title. This means that the concession’s duration should take precedence, as there have been cases where the concession and contract durations do not align, causing potential operational and legal complications. Therefore, if the mining title is renewed, the contract should also be extend - ed accordingly and have the same duration as the mining title.
essential matters as set out below. Duration of the exploitation contract
The Mining Law does not establish a specific duration for the exploitation contract, allowing the parties the flexibility to negotiate its dura - tion. However, to address this issue objectively, the contract duration should be based on tech -
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