Ecuador's Mining Industry Seeks Constitutional Court Ruling on Controversial Fee

Ecuador's mining industry is challenging a new fee announced by the government, which they see as a tax that will hinder exploration. The industry claims that some junior firms would have to pay more than their market value, limiting investment in the country's gold and copper deposits. The government argues that the fee will generate $229 million annually for regulator ARCOM and benefit the industry by funding efforts to counter informal mining. The legal dispute could take two years, with the chamber hoping to get a ban on the fee's collection within weeks.

Ecuador's mining industry has filed a constitutional challenge against a new regulatory fee imposed by the government, arguing that it hinders exploration and is an unfair tax. The chamber of mining, led by Maria Eulalia Silva, contends that the fee has formal flaws and is a hidden tax, requesting a court injunction to prevent its enforcement [1].

The new fee, intended to generate $229 million annually for the regulator ARCOM, aims to fund efforts against illegal mining. However, the mining industry claims that some junior firms would be required to pay more than their market value, potentially limiting investment in the country's gold and copper deposits. The industry also argues that the fee could lead to a regulatory agency larger than the energy and mines ministry itself [2].

Ecuador's energy and mines minister, Inés Manzano, defended the fee, stating that companies willing to pay are doing so to help combat illegal mining, which is now occurring in 12 protected areas across the country. She also suggested that firms unwilling to pay should consider returning their concessions to the state. The legal dispute could take up to two years, with the chamber hoping for a ban on the fee's collection within weeks [2].

The mining industry's challenge highlights the ongoing tension between regulatory needs and industry concerns. The outcome of this legal battle could significantly impact Ecuador's mining sector and its efforts to combat illegal mining.

References:
[1] https://news.bloomberglaw.com/daily-tax-report-international/ecuador-mining-chamber-files-constitutional-challenge-to-new-fee
[2] https://www.bnamericas.com/en/news/ecuador-mines-minister-defends-oversight-fee-urges-inactive-firms-to-return-concessions