Resource World Magazine

A P R I L / M A Y 2 0 1 6 www.resourceworld.com 7 If the downturn in commodities has been tough on the Canadian and US mining sectors, there have also been some agonizing moments for those in South America. However, an important silver lining is increasingly discernible: legislative parameters have been over- hauled during the downcycle, while the understanding of what responsible mining can and cannot do in terms of development has become more nuanced. For example, Ecuador wants to foster more mining and has been busy overhauling its tax structures to make them equitable for all stakeholders. "We've been taking many steps over the past couple of years to create the right conditions: fiscal-stability agreements; tax incentives; and changes to the mining code to create a proper environment for the indus- try," Ecuador's mining minister Javier Cordova told Resource World at the recent PDAC conference. The minister also stressed Ecuador's status as an under-explored country with the potential for world-class deposits, highlighting Lundin Gold's Frute del Norte gold proj- ect as noteworthy. Ecuador expects about $8 billion in investment by 2023 from projects already underway. "Second-generation" projects are estimated to create about $4 billion in exports by 2025. Colombia is also revamping its mining strategy. For example, the vice-minister of mines, María-Isabel Ulloa, told Resource World that sound progress has been made with the country's processing of licences and permits. "Last year was a good one for the min- istry; its work was more efficient and we now have an institution that's successfully delivering concrete results," she said. The ministry has embedded a six-pillar strategy to speed further improvements, she added. The first pillar is to create legal certainty; the second to boost competitiveness; the third to build trust with all stakeholders; the fourth to improve infrastructure; the fifth to build up data, such as geological mapping; and the sixth to continue making improvements at the ministry. Chile and Peru have continued bolstering their appeal as renowned mining jurisdictions. However, matters have been somewhat complicated by anaemic copper prices. "Copper is important for Chile's revenues and we've developed the 2016 budget with greater fiscal responsibility to maintain the macro-economic balance," Chilean mining minister Aurora Williams told Resource World. "In January and February experts met to define the long- term copper prices and they established $2.48 per lb [average] across a ten-year term." Argentina has also made some great strides as part of President Mauricio Macri's effort to liberalize the economy. Export taxes on the mining sector were removed in mid-February, while local procurement rules were relaxed as well. Companies were also given a currency exchange boost after the Argentinian peso was allowed to float freely and subsequently devalue against the US dollar. "Around 70% of our operating costs in Argentina are in the local currency, so its devaluation gives us an immediate benefit," Goldcorp Inc. President and CEO, David Garofalo, told journalists at a PDAC media roundtable. However, it was also important to note that the country's provincial governments have a strong say over extraction, u3O8 Corp. [UWE-TSX] P resident and CEO Richard Spencer told Resource World. There was varying degrees of support for the industry among them, although background efforts have been underway to seek alignment on basic mining precepts that all the provinces can subscribe to. Diamond drilling at the Tinka Resources Ayawilca zinc-indium project in west- central Peru. Photo courtesy Tinka Resources Ltd.

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