Ecuador’s diverse geological landscape endows the country with world-class mineral potential and proven resources include gold, silver, copper, molybdenum, lead, zinc and oil, with copper and gold deposits standing out in particular.
This geological richness has given rise to many globally significant mining projects. Among them is the Fruta del Norte gold mine, operated by Canada’s Lundin Gold, which holds 5.1 million ounces of gold reserves and was ranked among the world’s top 10 high-grade gold mines upon its 2019 startup.
Another example is the Mirador copper mine, jointly developed by Tongling Nonferrous Metals Group and China Railway Construction Corporation, with 6.6 million tonnes of copper reserves, marking Ecuador’s first large-scale, open-pit copper mine.
To help investors gbetter understand the country’s mining regulatory landscape, the authors draw on our firm’s experience in Ecuadorian mining projects to provide a concise introduction to the relevant institutional framework from three perspectives.
Legal framework
To ensure the sustainable and efficient development, Ecuador has, through continual legislation and refinement, established a relatively comprehensive legal framework to govern mining activities. At present, this framework is composed of two main tiers.
Cheng Jun
Equity Partner
Zhong Lun Law Firm
The first tier consists of national legislation, including the Constitution of the Republic of Ecuador and the Mining Law. The second tier comprises administrative regulations and implementing rules issued by central or local authorities.
These include, for example, the General Regulations to the Mining Law, as well as specific implementation guidelines issued by the Ministry of Energy and Mines. Such instruments include the Guidelines for the Exploration and Exploitation of Mining Concessions and the Guidelines for the Granting of Metallic Mining Concessions.
The main regulatory bodies include the Ministry of Energy and Mines, the Mining Regulation and Control Agency (ARCOM) and the Geological and Energy Research Institute (IIGE).
The ministry formulates public policy, grants mining rights, and co-ordinates scientific and academic institutions. The ARCOM oversees regulation, supervision, auditing and enforcement across all mining stages. The IIGE produces and manages geological data to support land-use planning and geological risk prevention.
Mining rights system
Under Ecuadorian law, mining rights is a broad concept. According to article 17 of the Mining Law, the term encompasses several categories including: mining concessions; mining exploitation contracts; general licences and permits; authorisations for the installation and operation of beneficiation, smelting and refining plants; and commercialisation licences.
Zhao Zeyu
Associate
Zhong Lun Law Firm
Except for artisanal mining activities, which operate under a separate permit system, all other mining activities are governed by the concession regime. Depending on the area of the concession, daily extraction volume and other technical criteria, concessions are classified into small, medium and large-scale operations.
Although specific granting procedures vary slightly among these categories, all concessions share a 25-year validity period, are renewable for an equivalent term, and cover the entire project cycle, from exploration to exploitation and eventual closure. Concession holders may also transfer or pledge their rights in accordance with applicable law.
There are three main routes to obtain a concession: (1) acquiring shares in a company that already holds a concession, which requires no special governmental approval, only subsequent registration; (2) acquiring a concession through transfer, which requires approval from the Ministry of Energy and Mines and a supporting report issued by the ARCOM; and (3) participating in an official bidding process for new concessions.
The first two routes remain the most common for investors. Although Ecuador’s mining registry reopened in June after a seven-year suspension, it currently applies only to small-scale, non-metallic mining projects. For the medium and large-scale projects that attract most foreign investment, the system is not expected to reopen until the first quarter of 2026.
Rights and obligations
Under Ecuador’s Mining Law, concession holders enjoy a range of statutory rights but must also fulfil a corresponding set of legal obligations. Given space constraints, only several key points warranting investors’ particular attention are highlighted below.
1. Rights
Right of suspension. In the event of force majeure, or unforeseen circumstances that prevent mining operations from proceeding, a concession holder has the right to apply for a suspension of the concession’s validity until the obstacle is removed. Such suspension, however, must be formally approved by the Minister of Energy and Mines through a reasoned written resolution (Mining Law, article 58).
Right of protection. A concession holder may request administrative protection from the ARCOM, the national mining regulator, to suppress illegal mining, occupation or other infringements upon its lawful interests (Mining Law, article 63).
2. Obligations
Occupational safety and health. Concession holders must safeguard the physical and mental well-being of their employees, provide legally mandated medical services, and adopt an internal Regulation on Occupational Health and Mining Safety compliant with Ecuadorian law (Mining Law, article 68).
Local employment requirement. At least 80% of the company’s workforce must be Ecuadorian nationals. Priority must also be given to hiring residents of the concession area and neighbouring communities, accompanied by family welfare programmes benefiting employees. For the remaining positions, Ecuadorian technical personnel should be preferred. Foreign workers may be hired only if suitably qualified local candidates are unavailable (Mining Law, articles 75 and 77).
Training obligation. Concession holders are required to establish continuing training systems covering all employee levels, and to periodically file training plans with the relevant ministries (Mining Law, article 76).
Ecuador possesses considerable mineral resource potential and is now entering a favourable investment window. The country could serve as both a strategic source of raw materials and a regional foothold for Chinese enterprises expanding across Latin America.
Against the backdrop of a global supply chain reconfiguration, Chinese companies may capitalise on opportunities in this emerging mining jurisdiction through joint ventures, M&A or co-operative development, diversifying resource portfolios and enhancing their global competitiveness.
Cheng Jun is an equity partner and Zhao Zeyu is an associate at Zhong Lun Law Firm
Zhong Lun Law Firm
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E-mail: chengjun@zhonglun.com
zeyuzhao@zhonglun.com
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