Ecuador's Correa backs large-scale mining freeze

[Judi Lynn]

Ecuador's Correa backs large-scale mining freeze
Thu Apr 17, 2008 4:23pm EDT

By Alonso Soto

QUITO, April 17 (Reuters) - Ecuador will suspend large-scale mining exploration projects while a new mining law is approved to regulate the country's nascent sector, President Rafael Correa said on Thursday.

Correa, who has sought to tighten state control over Ecuador's natural resources, said a new mining law is expected to be approved in six months. A special assembly rewriting the constitution is expected to pass a decree on Friday to revoke illegal concessions and suspend mining activity in medium and large-scale exploration projects.

"Some concessions where there has been investment and exploration and that were about to enter the exploitation phase will be suspended for 180 days until there is a new legal framework," Correa told foreign reporters in Quito. "And we will write new (mining) contracts based on that legal framework."

The constitutional assembly is working to overhaul the mining sector to increase state control, which is fueling investor concerns over whether Correa will seek more control over mining operations as his ally, Venezuelan President Hugo Chavez, has done with the oil sector.

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