National Assembly Passes Mining Reform 77-70 — Environmental Permitting Overhauled

The Vote

Ecuador's National Assembly approved the Ley Orgánica Reformatoria del Código de Minería (Organic Mining Code Reform Law) on February 27, 2026, by a vote of 77-70 — a narrow but sufficient margin in the 137-seat legislature. The reform represents the most significant overhaul of Ecuador's mining regulatory framework since the 2009 Mining Law and is designed to accelerate large-scale mine development while addressing the country's chronic illegal mining crisis.

Key Provisions

Environmental Permitting Reform

The most consequential change replaces the existing single environmental license process with a tiered authorization system:

Tier	Project Scale	Approval Process	Est. Timeline
Category I	Artisanal (<300 t/d)	Simplified registration	30-60 days
Category II	Small-scale (300-1,000 t/d)	Environmental management plan	90-120 days
Category III	Medium-scale (1,000-5,000 t/d)	Full environmental impact study	6-12 months
Category IV	Large-scale (>5,000 t/d)	Comprehensive EIS + consultation	12-18 months

The previous system required all mining operations — regardless of scale — to undergo the same comprehensive environmental impact study (EIS) process, which typically took 2-4 years including consultation, review, and appeals. The tiered system proportions regulatory requirements to project scale, with artisanal operations facing the lightest burden.

Military Protection Zones

The reform authorizes the Fuerzas Armadas to establish protected military zones around approximately 400 identified illegal mining sites, primarily in:

• Esmeraldas province — alluvial gold mining along Río Santiago and tributaries
• Imbabura province — hard-rock illegal operations near formal concessions
• Zamora-Chinchipe province — illegal mining adjacent to Fruta del Norte and Mirador
• El Oro province — artisanal and illegal operations in Portovelo-Zaruma district

Illegal mining in Ecuador has grown into a $1-2 billion annual shadow economy, associated with organized crime, mercury contamination, deforestation, and violence. The military zone provision gives the armed forces authority to control access, confiscate equipment, and arrest operators — powers that previously required coordination between multiple civilian agencies.

Artisanal Miner Formalization

An estimated 50,000-80,000 Ecuadorians work in informal and artisanal mining. The reform creates a formalization pathway that allows artisanal miners to register with ARCOM (Agencia de Regulación y Control Minero), obtain simplified environmental authorizations, and sell production through legal channels — provided they meet minimum safety, environmental, and labor standards.

Formalization Metric	Target
Artisanal miners to formalize	50,000-80,000
Registration timeline	12 months from law effective date
Processing capacity limit	300 tonnes/day
Mercury use	Prohibited; cyanide alternatives provided

Current Mining Landscape

The reform is designed to bridge the gap between Ecuador's mineral potential and its operational reality:

Category	Count	Status
Large-scale operating mines	2	Fruta del Norte (Lundin Gold), Mirador (ECSA)
Large-scale in development	4-5	Cascabel, Cangrejos, Warintza, Loma Larga, Llurimagua
Medium-scale concessions	~50	Various stages of exploration
Artisanal/small-scale (legal)	~200	Registered with ARCOM
Illegal mining sites	~400	Targeted for military zones

With only two large-scale mines currently operating, Ecuador ranks far below its geological potential relative to Andean peers. Chile operates hundreds of large-scale mines; Peru, dozens. The reform aims to close this gap by reducing the regulatory timeline from exploration to production.

Political and Legal Landscape

The 77-70 vote reflected a coalition of pro-mining legislators from coastal and Amazonian provinces (where mining concessions are concentrated) against opposition from highland indigenous representatives and environmentalist blocs.

Ecuarunari, the highland indigenous confederation (and a member of the umbrella CONAIE), has signaled it will challenge the law in the Constitutional Court, arguing that:

• Prior consultation with affected indigenous communities was inadequate
• The tiered permitting system weakens environmental protections guaranteed under the 2008 Constitution
• Military zones infringe on indigenous territorial autonomy

A Constitutional Court challenge could take 12-18 months to resolve and could result in partial or full suspension of the law. Ecuador's Constitutional Court has previously struck down mining-related legislation on consultation grounds, creating significant legal uncertainty.

Industry Reaction

The Cámara de Minería del Ecuador welcomed the reform, calling it "the most important signal to international investors in a decade." BNamericas reported that mining executives view the tiered permitting system as a potential reduction in project development timelines of 1-2 years — worth hundreds of millions of dollars in avoided carrying costs for large-scale projects.

What to Watch

• Constitutional Court challenge timeline — Ecuarunari's filing could be submitted within 30-60 days; a preliminary injunction could suspend implementation
• ARCOM implementation capacity — the regulator must develop new application forms, review processes, and staffing for the tiered system within months
• Military zone enforcement — whether the armed forces effectively reduce illegal mining or whether operations simply relocate to ungoverned areas
• Artisanal formalization uptake — the success of the program depends on miners seeing clear economic advantages to operating legally
• Investor response — whether exploration and development budgets increase in the wake of the reform, particularly from Western operators considering new concessions

Sources: Mining Reporters, ARCOM