CASE STUDY:
THE ANDEAN COPPER BELT: The Australian mining footprint in Ecuador
By Liz Downes | Image: An indigenous woman from the Amazon protests the environmental policies of President Lenin Moreno’s government, in Quito, Ecuador, March 12, 2018 (AP photo by Dolores Ochoa). Last updated November 2024. Visit the website of Melbourne Rainforest Action Group for more details, reports, articles and media releases.
Since 2016, around seven million hectares of land in Ecuador has been sold by the government, under zero public scrutiny, to international mining companies keen to take advantage of the country’s promise of untapped reserves of copper and other base metals. Around two thirds of the concessioned land covers protected forests and Indigenous territories. In the globally favourable copper market, Ecuador plans to increase its competitiveness with respect to its Andean Copper Belt neighbours, Peru and Chile. President Guillermo Lasso is executing policy changes to make the country more investment-friendly, promoting ‘environmentally sustainable’ mining which provides raw minerals for the climate transition. Ecuador expects mining investments to reach $US 4.2 billion by 2025.
As of November 2021, Australian companies held 33.3% of total mining concessions covering 706,039 hectares. Companies include BHP, SolGold, Newcrest, Fortescue Metals Group, Hancock Prospecting, Titan Minerals, Pelorus Minerals and Sunstone. SolGold, a subsidiary of DGR Global, has the biggest footprint. The company owns 220 exploration licenses – around 60% of the Australian investment in Ecuador. Several of SolGold’s priority projects have encountered strong resistance from local communities due to lack of free and prior consent, incomplete environmental assessments during the licensing process, and aggressive socialisation tactics.
SolGold’s flagship project is Alpala-Cascabel, located in Ecuador’s northwest. The project, expected to be in production by 2030, is considered a lucrative investment and was given the green light for development by the Ecuadorian Government in early 2024. In a 2019 report Ecuador’s Ministry of Energy and Mines said the mine could become the world’s sixth largest copper producer, with an average output of 150,000 tonnes per year. Other Australian heavyweights, BHP and Newcrest, own significant shares – 13.6% and 13.5% respectively. While investors talk up Cascabel’s potential, expert reports have cited grave concerns about the project’s environmental assessment process, waste management plan, and its proximity to existing mining conflict zones near the Colombian border. See this report by Melbourne Rainforest Action Group for more details.
BHP has 14 copper exploration concessions, mostly in the northwestern province of Imbabura, covering megadiverse areas in national park buffer zones. The company is relying on its high-value Cascabel stake to boost shareholder confidence in its other investments. Community resistance peaked in early 2020 with regional assemblies, the ratification of local government ordinances detailing the region’s stance against mining, and road blockades. In November 2021 another regional assembly was held which unanimously rejected attempts by BHP to socialise communities within its Santa Teresa concessions. In early 2022, in response to the increasingly unified resistance, BHP announced that it would be discontinuing exploration activities in the area. As of late 2024 the company appears to have stayed away.
Hanrine, an unlisted subsidiary of Hancock Prospecting, owns nine concessions in the provinces of Pichincha and Imbabura, two of which have been the locus of armed conflict and human rights abuses since 2019. Through the course of 2021 the company made several attempts at forcing entry to the town of Buenos Aires in northern Imbabura, blocking access to the town’s residents and hiring military police to violently break up peaceful protests. In 2020 Hanrine bid for a $400 million stake in the grand-scale Llurimagua copper project, currently joint-owned by state mining company ENAMI and Chilean copper giant Codelco. Works at Llurimagua have been on hold since 2018, due to investment battles and an ombudsman’s report which posited that the project will be one of ‘the highest-risk mines’ in the world, due to the region’s topography, seismic activity, biodiversity and decades of local resistance against mining.
In late 2023 Hanrine finally caved in to the strategic public pressure from community organisations, environmental and human rights groups, the Public Defenders Office, and legal advocacy groups. The company moved its machinery out and finally formalised its departure in September 2024. However the news is not all good. The town of Buenos Aires has been left to deal with thousands of illegal miners who have swarmed into the region in Hanrine’s wake; community organisations continue to put pressure on the Ecuadorian Government to step in. Hanrine, meanwhile, has moved its operations to the south of the country. For more details about Hanrine, read this comprehensive 2024 report by Melbourne Rainforest Action Group – Hancock Prospecting: Seven years of reported violations.
When dealing with land grabbing on such a massive scale as this, backed up by a global neoliberal empire, there is no such thing as a fast win. We remain in solidarity with the land and water defenders of Ecuador and national resistance fronts such as the Frente Nacional Antiminero.