Conflicts with indigenous communities have stalled operations at Ecuador's San Carlos Panantza copper mining project, which the government of President Lenin Moreno had long pointed to as an example of mining sector expansion that would generate US$ 40 billion in export revenue over the next decade.
Many now view the US$ 3 billion project bankrolled by China's ExplorCobres S.A. as emblematic of the turmoil impeding Ecuador's push to become an Andean mining power to rival Peru and Chile.
The project had been slated to start exporting copper this year, but a dispute with the Shuar indigenous community led ExplorCobres to halt the project nearly two years ago, according to the country's mining authority, which says the company does not believe conditions on the ground are suitable to resume work.
Unknown assailants in March set fire to mine installations and stole equipment.
In a series of complaints, indigenous groups say the government did not adequately consult them about projects. The strife is undermining Ecuador's ambitious plans to develop large-scale mining as an alternative to its oil industry.
There is not a consensus on what role mining should play in the development of economy, and communities often feel like they've been run over, said Sergio Guzman, Andean region director for consultancy group Colombia Risk Analysis.
”A conciliation is needed between the (government's) mining objectives, and how this results in (benefits) for the communities.”
Of the five projects with US$ 7 billion in investment that form the backbone of the mining effort, two - including San Carlos Panantza - have completely halted. A third is relocating some facilities due to local opposition.
Other projects that are less advanced face pushback from local leaders still unconvinced their communities will benefit from an industry plagued by worries about environmental damage and limited job creation.
On Wednesday, Ecuador's electoral court approved a referendum to be held in February that will ask voters if they want to outlaw mining near rivers that run through the city of Cuenca. The results would be binding but not retroactive.