Mining companies object to new requirement that they generate their own electricity

Mining company owners and representatives are objecting to a new regulation requiring mines to provide electricity to power their operations. They claim the requirement was not included in original mining concessions and is an indication of the government’s failure to modernize and expand the country’s electrical capacity.

The Fruta del Norte in Zamora-Chinchipe Province is one of two large-scale mines in Ecuador. There are dozens of smaller legally sanctioned mines.

In a December 31 executive decree, President Daniel Noboa ordered all mining concessionaires to generate electricity “to cover 100% of their energy demand.” Noboa had issued a similar order during Ecuador’s 2024 power crisis, but it applied only to the time of electric blackouts.

Former Minister of Mines Rebeca Illescas, who represents mining interests, claims Noboa’s decree violates constitutional language requiring the government to provide electricity to all businesses as well as residents. “There is also an issue of bad faith since the government did not include this requirement when it issued mining the concessions,” she said. “If the companies were aware of this before they signed their agreements, many of them would have opted out. Obviously, this adds a tremendous expense to operations.”

Spokesman for Ecuador’s Chamber of Mining Freddy Iglesias went further in his criticism of the new decree. “This shows the failure of this and previous governments to adequately plan and execute additions to the national power supply,” he said. “They knew the demand was growing rapidly but kicked the can down the road to the next government. Now, the Noboa regime is facing another blackout scenario because of this failure and is asking the mining industry pay for it.”

Iglesias added: “This is obviously a political decision since the government wants to assure that residential customers have electricity. They understand that this is where the votes are.”

Illescas says the new order will discourage new mining companies from entering the market and could prompt currently operating mines to shut down. “In the end, it is the residents of Ecuador who will suffer as revenues that support the national budget will decline,” she said, adding that it will also encourage illegal mining which will tap into the electric grid illegally.