Mining companies are some of the biggest job creators on the planet; responsible for upwards of 650,000 jobs in the US alone. This kind of job creation is a critical element in local and national economies. While this is a huge boon for countries like Canada, the United States, and Australia, it is even bigger for developing countries and economies.
The mining industry is critical to national development not only through job creation but through the investments and taxes paid in the country’s they operate in. A recent presidential election in Ecuador has highlighted the importance of the industry and the power it has to change economies and lives for the better.
Particularly after a year and a half of COVID-19 economic stagnation, countries are looking for ways to kick things back into gear. Mining companies seem ready to answer the call.
Ecuador’s President Guillermo Lasso has committed fully to turning the country’s economy into a powerhouse while addressing public health concerns, paying down fiscal and sovereign debts, and specifically expanding the country’s mining industry.
To do so, he has issued a brand new presidential decree titled “Decree 151”. The decree outlines a clear plan for the country and the mining industry as its role has become critical in recent years. The decree includes a new mining policy that provides a “clearly articulated plan” to boost the mining sector. At the same time, it lays out a plan for drawing in foreign investment through the industry and other areas, helping to boost the economy while maintaining the responsible mining practices that are essential in a cleaner, greener world.
The president has singled out some partners already leaving this mission, including Solaris Resources, whose CEO Daniel Earle recently met with President Lasso to discuss the decree and the company’s Warintza project.
The copper exploration company has been operating in Ecuador for several years, and its Warintza project has been singled out as a model for responsible mining by Ecuador’s Vice Minister of Mines, Xavier Vera Grunauer.
President Lasso will have his work cut out for him; the country was going into a pandemic with a tight fiscal situation. Now, the country will need to boost domestic and foreign investment to combat the effects of lockdowns and restrictions.
There is a silver lining in those clouds though, with the copper mining industry showing an appetite for expansion like never before. The global push for decarbonization has meant that the red metal will be needed in huge quantities. Reports show that demand far outstrips supply, and this dynamic should continue to push copper prices even higher.
For Lasso’s Ecuador, rich in copper deposits, this is very good news. Companies like Solaris Resources exploring some of the most valuable copper regions in the world will likely be part of the solution for how countries can begin to dig out of tricky fiscal situations.
Paying down debts will require levying more taxes from citizens and companies, but there must be jobs first to do so. The mining industry is showing healthy signs for hiring and is finding that there is a shortage of candidates to choose from. This is partly because the industry is picking up faster than expected and there aren’t enough graduates to apply for positions.
The signs of a mining boom continue to pile up, with rising commodity prices colliding with the growing demand to create a kind of perfect storm for expansion. For developed and developing economies alike, this is a positive sign for the future, and the present.
In Ecuador, voters will be paying close attention to the results of Decree 151, and other promises made by Lasso during the campaign. However, as big as the challenges Lasso faces are, he has strong tailwinds behind him from the mining industry moving things in the right direction.
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