Big profits are made when new exploration terrains open up. And news this week suggests one place on the planet is trying to position itself as the next big opportunity for mining investment.
The country's Minister for Strategic Sectors, Rafael Poveda, told local press Monday that Ecuador's government is about to offer up a slate of mining exploration and development projects, looking for investment from foreign developers. Related: U.S. Shale Lifelines Running Thin
The Minister noted the government has identified 25 mining projects across the country for tender to foreign investment. With these areas planned to be offered for exploration and development licensing in the first quarter of 2016.
Overall, the government said it is projecting $588 million of investment in its mining sector during 2016. With officials hoping to increase those investment figures to $1.5 billion by 2017.
If this exploration licensing round does go ahead, it will be very interesting to see what the appetite is from foreign mining firms and investment groups. Related: New Silk Road Could See China Gain Control Of The Copper Markets
On the one hand, Ecuador has undoubted potential for big discoveries. Especially in gold and copper -- with deposits like the country's Fruta del Norte gold project representing some of the largest finds globally during the last exploration cycle.
But that cycle ended badly for Ecuador. With concerns about high taxes and legal stability in the country causing most project developers (including Fruta del Norte's owner, Kinross Gold) to exit the country. Related: Iran May Not Be That Attractive To Oil Industry After All
Minister Poveda said this week that the tax issue has now been addressed with new legislation bringing tax rates to 26 percent, on par with other countries in the region.
But the very fact that the Minister comes from a department called "Strategic Sectors" may give developers pause for concern -- given Ecuador's past forays into nationalism in the mining industry.
Watch to see what projects are put on offer in the first quarter of 2016. And what response the tender receives from the mining community -- which will be a good measure of whether this high-potential nation really is back on the right track.
Here's to proceeding cautiously,
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