Ecuador miners need their own power
Ecuador miners need their own power
Faced with an energy crisis, Ecuador’s president Daniel Noboa has issued a decree that mining projects need to include the development of their own power sources, rather than taking from the national grid.
Executive decree 273 introduced several reforms to the General Mining Law that change mining investment conditions in Ecuador, including that project developments have to include plans to provide for 100% of the power they will require, regardless of operation size.
“By requiring electrical self-sufficiency, the government reduces pressure on the power grid and shifts infrastructure costs to mining projects,” said analyst Sebastián Angulo reported La Hora.
Decree 273 also update the methodology for the calculation of royalty payments to the state to give a more precise definition over what royalties will be levied against, specifically gross revenue or effective net revenue. It also provides specific rules for strategic minerals such as gold and silver.
For gold and silver, the decree establishes that the royalty will be calculated on the effective net income from the primary mineral, separating it from secondary minerals and preventing income from being diluted through accounting manipulations or broad cost allocation. The goal is to standardize the calculation and close loopholes that affected revenue collection.
Within 90 days, the relevant government agencies, including the tax authority, must issue a mandatory technical regulation detailing which expenses can be deducted, what their limits are, and how net income is precisely determined in gold and silver projects.
The government said the mining code reform is not retroactive and entered into effect on January 1, 2026. Existing contracts signed before the decree was issued will maintain the scheme in effect at the time they were signed.
Decree 273 also sought to tighten exploration time limits. Although the initial exploration period will continue to be a maximum of four years, if the permit holder does not initiate environmental procedures in a timely manner, or incurs delays in them, the deadline will begin to run automatically. The government said that the speculative hoarding of concessions will no longer be tolerated.
Paul Harris
Paul has more than twenty years’ experience in the mining sector in investor relations, communications, research and news reporting roles. Paul has 16 years’ experience in the Colombia gold sector including investor relations roles with Continental Gold, Gran Colombia Gold and Mineros.
Paul founded the successful Colombia Gold Symposium in 2016 and has written for industry leading publication Mining Journal since 2015. Previously, Paul spent five years in Chile reporting and researching the copper sector for CRU and Metal Bulletin. Paul received a BA in Business Administration from the University of the West of England, UK; and a MA in International Relations from the University of Chile, Santiago Chile. He is fluent in English and Spanish.
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