Ecuador to revoke non-producing mining concessions

Hoping to inject life into the country's lackluster mining industry, Ecuador President Rafael Correa said in an interview with Reuters on Saturday he would revoke concessions on properties that are not being exploited.

Correa also said he plans to renegotiate current terms with companies that are exploring for minerals in the Andean country.

Ecuador is in the heart of mineral-rich South America, but it has little real mining output, in part because speculators have bought up thousands of concessions and are holding them in the hopes of selling them at a higher price in the future.

"There are five or six companies that are producing, and we'll negotiate with them, but we will revoke the concessions from the rest of them," Correa said on the last day of a three-day summit of Latin leaders in the Chilean capital Santiago. He did not mention the companies by name.

Mining concessions in Ecuador are currently cheap to hold, subject to a low and renewable annual ownership fees.

Ecuador is also working to establish contracts between the government and mining companies that will set royalties at a referential price for the mineral extracted, but as with oil deals, mining firms will have to share part of their windfall revenues if metals' price rise in the market.

Mining companies currently have no contracts with the government and do not pay royalties.

Canadian companies such as Corriente Resources (CTQ.TO: Quote, Profile, Research)(ETQ.A: Quote, Profile, Research), Iamgold Corp (IMG.T0: Quote, Profile, Research) and Aurelian Resources (ARU.TO: Quote, Profile, Research) are exploring for gold and copper in Ecuador.