Ecuador has finalized a US$1.7 billion mining contract with China’s CMOC Group (OTC Pink:CMCLF) to develop the Los Cangrejos gold and copper deposits, according to a report. Reuters report.
The agreement signed with CMOC’s local subsidiary ODIN Mining del Ecuador is expected to transform the site in southwestern El Oro province into the country’s third large-scale mining operation.
According to Ecuador’s Energy Ministry, the 26-year open-pit development will generate an estimated US$4.39 billion in state revenue over its lifetime through a combination of taxes, royalties and structural fees.
Under the negotiated terms, the Ecuadorian state retains 50 percent of the total value of the project. In addition, Quito will receive US$54 million in upfront royalties, with an initial US$34 million to be paid upon signing. The remaining US$20 million is tied to future construction goals, including the start of both processing plant operations and active mining.
The Los Cangrejos agreement signals a potential turning point for the Andean mining sector that has been hampered by rule changes, litigation and fierce community opposition.
Currently, Ecuador relies on only two large-scale operations: Lundin Gold’s (TSX:LUG,OTCQX:LUGDF) Fruita del Norte and the Chinese-backed Mirador copper mine, both of which entered commercial production in 2019.
The Ngoba administration, which secured a full four-year term in office in April 2025 after a surprise election victory in late 2023, has positioned mining as the primary engine for economic stabilization.
To clear the backlog of delayed projects, the government took a comprehensive step new mining law At the end of February.
The legislative overhaul is designed to streamline a permitting timeline that previously stretched out for two years, introducing an “environmental authorization” system that set royalty rates between 3 and 8 percent of sales and redirecting the majority of those proceeds directly to local municipal governments to help mitigate community resistance.
Noboa also committed to strengthening state security in mineral-rich areas and cracking down on illegal mining operations.
CMOC acquired the Los Cangrejos property through 2025 acquisition of Lumina Gold in an all-cash transaction worth US$420 million.
Located about 450 kilometers southwest of Quito, the site is considered the largest primary gold deposit in Ecuador. Based on a 2023 pre-feasibility study, the scale of the deposit places it as a globally significant asset.
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Securities Disclosure: I, Gian Liguid, do not have any direct investment interest in any of the companies mentioned in this article.
