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Melbourne - BHP Billiton [JSE:BIL] and billionaire Gina Rinehart’s Hancock Prospecting are among commodity producers to have held talks over a potential entry into mining and exploration projects in Ecuador, according to the nation’s government.
Both producers had discussions with officials on the prospects of making investments or securing exploration leases, Mining Minister Javier Cordova Unda said Tuesday in an interview in Melbourne. Cordova has met with BHP personally, he said.
BHP has shown interest in a number of copper projects, including a potential partnership with state-owned miner Enami and Chile’s Codelco in their joint Llurimagua copper and molybdenum project, Cordova said.
Andrew Forrest, chairperson of Perth-based Fortescue Metals, has traveled to the nation in recent months and met with Ecuador’s Vice President Jorge Glas to discuss exploration, the nation’s Ambassador to Australia, Raul Gangotena, said in the same interview.
BHP’s exploration program includes work in the Americas and the producer is seeking partnerships, the company said in an e-mailed statement, declining to comment on any specific discussions.
Fortescue, which has tenements in Ecuador, “continues to undertake early stage, low cost exploration and to assess business opportunities in Australia and internationally,” CEO Nev Power said in a statement. Hancock Prospecting didn’t immediately respond to requests for comment.
Copper race
“These are names that are leaders in the industry and to see them not only looking into Ecuador, but already giving the first steps to investing is encouraging,” Cordova said, speaking on the sidelines of the International Mining and Resources Conference.
Hancock has held meetings in Ecuador and visited four times in the past year, while BHP has held talks with the ministry and partners in the Llurimagua project, he said.
The biggest miners are racing to secure exploration projects in Ecuador to tap its undeveloped copper and gold deposits as output from aging mines, including in South America, begins to decline. Copper is forecast to fall into a market deficit by the end of the decade amid rising demand and a lack of sufficient new operations.
Newcrest Mining fought off interest from BHP last month to agree to pay about $22.8m for a 10% stake in SolGold, a Brisbane-based explorer with a copper and gold project in Ecuador. Competition for quality exploration projects is likely to intensify as the hunt for new assets becomes harder, Newcrest CEO Sandeep Biswas told reporters on Tuesday in Melbourne.
About 10% of Ecuador has been explored and there are opportunities for major new discoveries, according to Cordova. The country has also revised tax laws, created a mining ministry and is upgrading infrastructure in a bid to woo investments, he said.
“This is the perfect time for us and the industry,” Cordova said. “It’s the reason why the likes of BHP are looking around, because many of the projects in Chile are declining and they are looking for new opportunities.” Chile is the world’s biggest miner of copper.
Ecuador expects producers to make at least $8bn in investment in new mines by 2024, according to Cordova. “I strongly believe that those numbers are going to be much higher,” he said. “We are seeing now a lot of interest in Ecuador and it’s very encouraging for us.”
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