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What's Next for Mining in Ecuador?
Contributed Opinion

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Chris Temple Chris Temple of The National Investor shares his insight as to what to expect in the near term from Ecuador in light of the recent elections, specifically with a focus on the mining industry.

I continue to follow several media sources in and out of the country daily in an attempt to figure all that out for all of us. It's going to be a fairly fluid situation come election time (elections have been scheduled for August 20, but — given the disparate "blocs" and several already-announced presidential candidates — odds are high that runoffs will drag things well into the fall.)

The relatively good news between now and the upcoming election is that President Lasso is far from a lame duck.

He is able to basically rule by decree, "checked" by Ecuador's Constitutional Court only given that the National Assembly as a matter of law presently doesn't exist. In some ways, this is allowing for the enacting of regulations and such that have bogged down previously; the BIGGIE for the mining industry this week was that Lasso signed the decree finalizing the regimen for the "community consultation process."

In rapid-fire fashion, when this news broke this week, pretty much every mining company involved in the country was sending out press releases lauding the news (reportedly, nearly 100 various projects have been stuck in the mud waiting for these rules.)

One as you already know, was BacTech Environmental Corp. (BAC:CSE;BCCEF:OTCQB;OBT1:FRA), which can now schedule its own community consultations on the way to getting its own final permit.

As a corollary and in anticipation of that, as you can read here, employing Moody's as a third-party verifier of its qualification to be a "Green bond" issuer.

I'll have more to say separately on BacTech shortly, as the clock has started ticking again toward financing and development at Tenguel.

As of the moment, it is uncertain whether Lasso will run: at first, he said he would step aside but has since hedged on that. If he does stay out of the way, rumor has it that the "conservative" candidate would be a well-known "law and order" official from the military. Otherwise, a few names from the last election (or two) are already in play: included are Andres Arauz (the "Correista" candidate from 2021, who narrowly lost to Lasso thanks to "help" for Lasso from the U.S.) and indigenous lightning rod Yaku Perez. Arauz has expressed his willingness to run again and is the favorite of this bloc, though the Rafael Correa-influenced Citizen Revolution movement is looking at a couple of other possible candidates.

A key as to whether Arauz (or whomever the Correista candidate is) can win is to what extent they are able to

  1. Outdo or at least match on the "law and order" front a Lasso replacement and more so.
  2. Make peace at last with the indigenous blocs. On that latter, recall that former President Correa has never been forgiven for — in their eyes — his fostering of the oil and mining industries and not allowing illegal protests and vandalism by indigenous people to go unchallenged.

Inevitably — though many sore spots remain, including both illegal mining and some oil development in the Amazon — cooler heads among indigenous leaders need to come to grips with the reality that regulated, legal development of the country's resources is needed for everyone's living standards to improve. If whoever the Citizens Revolution candidate is can rebuild bridges here, he/she will be the next president.

To what extent will Correa himself be directly involved in endorsing/supporting someone will be interesting — even fun in some respects — to watch. In a country with very fragmented political loyalties overall, he remains the single most-popular figure, as one friend and well-connected colleague in the country told me several days ago.

He will probably be heard from more than anyone, even though he remains in "exile" in Belgium. Notwithstanding the good news on the mining industry front mentioned above, for Ecuador to really recover will require a new government. Lasso can shore things up and — with a fairly free hand — do some things to benefit the economy and restore some order. But among other things, a big free trade deal with China that would substantially boost exports is in limbo; it will need to be ratified by the National Assembly once Ecuador has one again.

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Important Disclosures:

  1. BacTech Environmental is a billboard sponsor(s) of Streetwise Reports and has paid SWR a sponsorship fee between US$3,000 and US$5,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of BacTech Environmental.
  3. Chris Temple: I, or members of my immediate household or family, own securities of: BacTech Environmental.
  4. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
  5.  This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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Chris Temple Disclosures: 

The National Investor is published and is e-mailed to subscribers from [email protected]. The Editor/Publisher, Christopher L. Temple may be personally addressed at this address, or at our physical address, which is: National Investor Publishing, P.O. Box 1257, Saint Augustine, FL 32085. The Internet web site can be accessed at Subscription Rates: $275 for 1 year, $475 for two years for "full service" membership (twice-monthly newsletter, Special Reports and between-issues e-mail alerts and commentaries.) Trial Rate: $75 for a one-time, 3-month full-service trial. Current sample may be obtained upon request (for first-time inquirers ONLY.) The information contained herein is conscientiously compiled and is correct and accurate to the best of the Editor’s knowledge. Commentary, opinion, suggestions and recommendations are of a general nature that are collectively deemed to be of potential interest and value to readers/investors. Opinions that are expressed herein are subject to change without notice, though our best efforts will be made to convey such changed opinions to then-current paid subscribers. We take due care to properly represent and to transcribe accurately any quotes, attributions or comments of others. No opinions or recommendations can be guaranteed. The Editor may have positions in some securities discussed. Subscribers are encouraged to investigate any situation or recommendation further before investing. The Editor receives no undisclosed kickbacks, fees, commissions, gratuities, honoraria or other emoluments from any companies, brokers or vendors discussed herein in exchange for his recommendation of them.

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