Codelco and Ecuadorian state-owned company to start drilling works in main project in Ecuador
18-Jul-2012 Pulso – News
Chilean company holds preemption rights for minor participation in mine ownership which is considered as the hope for the mining development in Ecuador. However, expectations have become more realistic as decision will not be made before a decade
The Ecuadorian venture of Codelco is only one chapter left. During this long exploration journey the Chilean state-owned company is jointly taking with Ecuadorian Mining National Company (ENAMI for its acronym in Spanish) they have already participated in more than twenty exploration campaigns with no success so far. However, just like in a novel, the last chapter might change the course of the story. Up to this point the story is leading to the end of campaign, end of alliance, and acknowledgment of loss. However, Junín, the last of mines in the list might change the end of the story.
The problem here is that expectations from both parties are quite different at the moment. Last week, President of Mining Industry Chamber in Ecuador, Santiago Yépez, stated to Bloomberg that Codelco is negotiating to be granted access to Junín ownership, which he classified as a “world-class deposit” with enough copper and molybdenum content to compare to large size mines in Peru and Chile. It was even compared with Collahuasi size.
However, cold water was poured on these statements from Chile as neither Codelco is negotiating participation terms for Junín ownership nor is it so clear for the deposit to be “a world-class deposit” as stated in Ecuador.
The deposit classification cannot be ascertained yet because drilling works have not even started. The only available information is a drill work carried out in the 80’s which was certainly auspicious by that time but that must be updated.
Specifically, exploration campaign will start in 2013. Only once this is completed the Junín size will be certainly known to start pre-feasibility and feasibility studies that will finally lead to an investment decision. Only then will Codelco decide whether to use the preemption right it holds by which the Chilean state-owned company might purchase 49% of Junín as mining law in Ecuador binds the Ecuadorian state to withhold majority of shares.
“Codelco has made an agreement with Ecuadorian Government through Ecuadorian ENAMI EP to collaborate in exploration activities the Ecuadorian state-owned company decides to carry out. Within this agreement frame since 2008 Codelco has accomplished basic exploration works in several projects owned by ENAMI EP, i.e. Ecuadorian state. However, up to the moment no project of interest for both parties has been realized yet”, as officially stated Codelco.
There is nothing yet
“Within this agreement frame no explorations have been carried out for Junín project (owned by ENAMI EP), consequently it cannot be said a mineralized body exists and much less can its size or ore content be defined yet. Consequently, it is not true Codelco is considering to buy a deposit in Ecuador”, was asserted by sources from the Chilean company.
Codelco is not the only Chilean company making business in the country lead by President Rafael Correa.
ENAP has a gas and oil exploration concession at Guayaquil Bay and it was also interested in participating in YTT deposit exploitation in Ecuador jungle.
