By Mercedes Alvaro
QUITO, Ecuador--The government of President Rafael Correa has sent to the National Assembly a bill to reform the country's mining law, that includes some changes requested by private investors.
The bill was categorized as urgent, meaning lawmakers either vote on it in 30 days or it automatically becomes law.
To pass the law, the government needs about 70 votes of the 137 in the Assembly.
Observers said that Mr. Correa won't have difficulty in passing the reform bill because Alianza Pais, the ruling party, has 100 seats in the Assembly.
"We have a very good mining law, but we have made some mistakes and it was too strong in some aspects and there were not as many investments as we expected," Mr. Correa told reporters on Thursday.
Mr. Correa added that the bill is "changing some reasonable things asked by investors."
Among the changes, the new law to allow the 70% windfall tax to be applied when investments are recovered.
The reforms could pave the way to sign a production contract with Canada's Kinross Gold Corp. (KGC) for Fruta del Norte, the largest gold project in Ecuador, and with some other companies, whose projects are in advanced stages of exploration.
Currently, mining activity in Ecuador is underdeveloped compared with other Latin American countries and makes virtually no contribution to the country's economy.
Mr. Correa expects Ecuador to start large-scale mining production in the coming years.
So far, the government has only signed one production contract for Mirador, a large-scale copper mining project, operated by Chinese-owned Ecuacorriente S.A.
Ecuacorriente plans to begin construction of production facilities during the second half of this year at Mirador, and expects to start production at the end of 2015.
Write to Mercedes Alvaro at email@example.com