Government revokes Loma Larga environmental license effectively ending the mining project

Three days after Canadian mining company Dundee Precious Metals said it was temporarily ending operations at the Loma Larga mining site near Cuenca, the government made it permanent Saturday by revoking the environmental license for the project.

The protest march against the Loma Larga mining project September 16 is believed to be the largest single-day protest in Ecuador history.

The decision follows strong opposition from residents and local authorities in Azuay Province, where Loma Larga is located, who argue that its development would affect the Quimsacocha reserve, an area that acts as a watershed for much of the region south of Cuenca.

Ecuador’s Environment and Energy Ministry said in a statement the decision resulted from technical reports submitted by authorities in Cuenca and Azuay that are responsible for the area’s drinking water and irrigation systems. The decision also follows a protest march of more than 100,000 in Cuenca September 16. The protest is believed the largest in Ecuador history.

“The national government reaffirms its commitment to the rights of nature, the defense of water sources, and, under the precautionary principle, the protection of the health and well-being of the people of Cuenca and Azuay,” the ministry said in its Saturday statement.

Cuenca Mayor Cristian Zamora, one of the leading voices opposing the mine, spoke at a public event thanking the authorities for listening and revoking the license for the project that he said would seriously threaten levels of water available for local residents. “It has been a decades-long struggle, and I am glad that the government responded to the concerns of the citizens of Cuenca and Azuay Province,” he said.

Dundee Precious Metals, which acquired project rights in 2021 from another mining company, did not immediately respond to a request for comment. Many believe Dundee will sue Ecuador in the International Arbitration Court in London despite the fact that the mining agreement is based on the results of a favorable environmental study.

The Loma Larga project was expected to receive investments of more than $700 million for an average annual production of about 200,000 ounces of gold during its first five years of operation, according to Dundee.

In August, the Ecuadorean government had already suspended activities related to the project until the company released an environmental management plan, despite having granted it a license a month earlier to begin construction. Despite having significant gold and copper deposits, Ecuador has halted several mining projects due to recent legal rulings and local opposition. Currently, only two mining companies operate in the country.

The Quimsacocha Reserve spans more than 3,200 hectares and encompasses the Andean “paramo” ecosystem, a type of highland moor. Its springs form one of the main water sources in the South American country.

Despite the government’s revocation of the Loma Large license, several anti-mining groups say they will remain vigilant for efforts to resurrect the project in the future. In a press statement, the Federation of Indigenous and Peasant Organizations of Azuay said “it will never trust the state due to previous lies regarding its extractive projects.”