QUITO: Ecuador is close to signing contracts with Kinross and Ecuacorriente for two large mining projects with investment of $3 billion, a senior mining official said on Tuesday.
Leftist Ecuadorean President Rafael Correa has had a tumultuous relationship with foreign investors since first taking office in 2007, revising oil contracts to better favor the government and defaulting on the nation's debt.
Deputy Mining Minister Federico Auquilla told Reuters that it should take about two and half years for the companies to build the mines.
"We're pretty much done.we're working on the final document," he said in an interview.
The contracts call for royalty payments in advance, although Auquilla said the government would not say how much the companies will pay until the contracts are signed.
Correa has been striving to diversify the Ecuadorean economy from crude exports, and he has taken a softer approach to miners than the oil sector of OPEC's smallest member.
Kinross plans to develop Ecuador's largest gold project, Fruta del Norte, while Ecuacorriente - an affiliate of Canada's Corriente Resources will work on the Mirador copper mine.
The two mining projects would contribute about 5 percent to the country's gross domestic product, Auquilla said.
The advanced royalty payments will be used to pay for social projects including new hospitals in the areas where the mines would operate, he said.
Oil prices have allowed Correa to boost spending on hospitals, roads and schools, which has improved his popularity among the country's poor majority but also stoked inflation.
Auquilla said that Ecuador's state-run mining company Enami would soon sign a contract with Chile's Codelco to form a joint venture company to explore for copper and gold, and talks over three other mining contracts should conclude next year.
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