Ecuador’s Constitutional Court has given Cuenca the green light to hold a public referendum that could ban large and medium-scale mining activity near water sources. The Monday decision was denounced by the country’s Chamber of Mining, which claims a local ban would discourage international mining interests from investing in Ecuador.
The area around Cuenca is believed to hold some of the largest gold and silver deposits in South America, according industry experts.
Cuenca’s city council had asked the Constitutional Court approve questions for the referendum, which seeks to prohibit mining and pollution in areas surrounding five rivers that cross the city and are its source of water. The Court ruled in favor of five questions, but clarified that its decision was not retroactive to mining concessions already granted.
Cuenca is already home to key mining projects, such as Loma Larga operated by Canadian INV Metals Inc.
“It has been a dream for Cuencanos for so many years to be allowed, through popular consultation, to determine the future protection of our water sources,” Cuenca Mayor Pedro Palacios told reporters.
Under Ecuadorian law, participation in the referendum will be mandatory, according to city authorities who hope to include the issue on the February 2021 national election ballot.
The Constitutional Court, citing technical errors in the questionnaires, had previously denied three requests seeking a ban on mining activity in all of Azuay Province, where Cuenca is located. The Energy Ministry, which oversees mining activity, did not immediately comment on Monday’s ruling but is known to have opposed the referendum.
A representative of a mining industry group said the ruling would harm Ecaudor’s ability to attract investment to its mining sector. “The main effect is the hit to Ecuador’s international credibility and the financing of exploration activities,” said Andres Ycaza, a lawyer for the Ecuadorian Chamber of Mining.
Ecuador projects mining exports will reach about $642 million this year in the “most pessimistic” scenario.