Ecuador's Bold Move: Revokes Gold Mine License, Citing Environmental Lapses and Community Rights

In a significant move that has sent ripples across the global mining industry, Ecuador's Environment Ministry has dramatically revoked the environmental license for Canadian miner Dundee Precious Metals' (DPM) ambitious Loma Larga gold project. This pivotal decision, announced by Environment Minister Jose Davalos, cites a damning list of non-compliance issues and "fundamental errors" in the required consultation process with local communities.

The ministry's decree, issued in late 2023, underscores a firm commitment to responsible mining practices, emphasizing that DPM failed to adhere to the rigorous conditions set forth for such a large-scale endeavor.

Specifically, the revocation notice highlighted DPM's alleged inability to furnish crucial information to the ministry concerning water quality monitoring and unresolved social issues, alongside the critical lapse in adequately engaging with indigenous and local communities impacted by the project.

Dundee Precious Metals, headquartered in Toronto, has vehemently rejected the revocation, branding it "unlawful" and "unprecedented." The company has swiftly declared its intention to launch a comprehensive appeal, asserting that it has consistently operated within the bounds of Ecuadorian law and environmental regulations.

This high-stakes legal battle is set to unfold as DPM defends its significant investment and the future of the Loma Larga site.

The Loma Larga project, nestled in the southern Andean region, is a cornerstone of DPM's portfolio, acquired through its 2021 takeover of INV Metals Inc. The site boasts an impressive estimated gold production of 2.6 million ounces over a projected 12-year lifespan, making its abrupt halt a considerable blow to the company's long-term growth strategy and to Ecuador's aspirations for mineral resource development.

Adding another layer of complexity to the unfolding drama, the project was already embroiled in a separate legal challenge.

A provincial court had previously ordered a review of the environmental consultation process following a lawsuit filed by local communities. These communities contend that their right to prior consultation, enshrined in Ecuadorian law, was not adequately respected, echoing the very concerns now central to the ministry's revocation.

Minister Davalos's statements have consistently reinforced the government's stance, emphasizing that "responsible mining" must go hand-in-hand with "full respect for the rights of communities and nature." This serves as a stark warning to other international mining firms operating or planning projects in Ecuador, signaling a tightened regulatory environment and a heightened focus on environmental and social governance.

DPM, for its part, has highlighted the substantial investments already made in the project and the potential economic benefits it could bring to the region, including job creation and infrastructure development.

The company expressed disappointment at the ministry's decision, particularly given its ongoing efforts to address community concerns and ensure environmental stewardship.

As the legal showdown looms, the future of the Loma Larga project hangs in the balance. This case is poised to become a critical precedent for mining operations in Ecuador, testing the limits of corporate responsibility, governmental oversight, and the enduring power of community advocacy in the face of resource extraction.