There are two annual regulatory obligations that metallic, medium and large mining concessions must comply with until March 31st of each year, the first is the payment of conservation patents that must be submitted to the Agency for Regulation and Control of Energy and Non-Renewable Natural Resources and the second is the submission of annual exploration reports and investment plan to the Ministry of Energy and Mines.
(i) Conservation Patents
The calculation of the value of the annual conservation patents to be paid by the mining owners to the Ecuadorian State is based on the number of hectares of each concession and the regime, phase or period in which the mining property is located. It is important to emphasize that Article 34 of the Mining Law (hereinafter “LM”) is emphatic in stating that the competent authority will not grant any extension to comply with this obligation.
Below is a comparative table of the values to be paid depending on the regime, phase or period of the concession:
TYPE OF MINING | PERIOD | % RBU PER HECTARE UNDER CONCESSION |
Large Scale Mining- Medium Mining | Initial Exploration | 2.5% |
Advanced Exploration | 5% | |
Economic Evaluation of the Deposit | 5% | |
Extension Economic Evaluation of the Deposit | 7.5% | |
Exploitation | 10% | |
Small-Scale Mining | Exploration- Exploitation | 2% |
(ii) Annual Reports
On the other hand, the second regulatory obligation that mining concession holders must comply with and which is regulated in Art. 38 of the LM, are the annual exploration reports and investment plan, that is, information regarding the exploration and investment made by the company during the previous fiscal year and a forecast of the amounts to be invested in the current fiscal year.
It is important to point out that it is the obligation of the mining concession holders to comply with the above-mentioned obligations. Failure to comply with one of these obligations will be a cause for the expiration of the mining concession, in accordance with articles 110 and 111 of the LM.1
