It was a tough day for mining in Latin America yesterday, with prosecutors in Brazil announcing a $43.55 billion lawsuit against BHP Billiton and Vale over the Samarco tailings dam rupture.
But even as BHP was facing serious headwinds in iron ore here, the major miner turned up hopeful in another part of South America — a spot that may surprise many observers.
That’s Ecuador - Where local press has reported that top BHP executives met with the government to discuss opportunities in the country’s copper sector. Related: OPEC’s No. 2 Under Serious Threat From Political Instability
Reports noted that Ecuador’s minister of strategic sectors, Rafael Poveda Bonilla, sat down Monday with BHP’s vice-president of copper exploration, Jean de Rivieres, as well as commercial manager of copper exploration Lauren Arias.
News stories didn’t get into too much detail on what was discussed, simply saying that the officials “analyzed investment possibilities” in Ecuador’s mining sector. Minister Bonilla presented his case on why Ecuador holds high-potential geology and a legal framework to speed development. Related: China Looking To Secure Oil Supplies By Buying Stake In Rosneft
This is, of course, the exact opposite of the image Ecuador has come to hold for mining investors the last several years. With the country lately being viewed as a difficult locale for mining investment, after high-profile political problems with mega-deposits like the Fruta del Norte gold project.
But there’s no doubt the country holds some very prospective rocks, especially when it comes to copper — evidenced by major deposits like Mirador, now being put into production by Chinese interests.
This week’s meeting shows BHP may believe the political climate in Ecuador is becoming workable. Prompting the major to consider an entry, and take a shot at the mineral potential here. Related: Why Iran’s Shale Oil Discovery Won’t Add To The Glut
That’s a very interesting data point in light of other big deals done in Ecuador’s mining sector recently. Most notably the purchase of the Fruta del Norte gold deposit by famed mining entrepreneur Lukas Lundin.
The fact that Lundin and now BHP are once again looking at Ecuador could signal a turnaround in the works for this former pariah. Watch for deals coming on exploration and development projects from BHP and beyond.
Here’s to knowing when to move,
By Dave Forest
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