Ecuador Reopens Its Mining Registry — and Hands Indigenous Courts a Loaded Weapon

What happened

On 26 February 2026, Ecuador's National Assembly approved the Organic Law for the Strengthening of the Strategic Mining and Energy Sectors by a narrow 77–70 vote, with the legislation entering into force on 2 March following publication in the Official Register. The law represents, in the government's framing, the most comprehensive overhaul of Ecuador's mining regulatory framework since the original 2009 Mining Law and its 2013 amendments. Its centrepiece provisions reduce environmental impact assessment timelines from eighteen to twenty-four months down to twelve to fifteen months, consolidate construction permits into a single-window process through the regulator ARCOM, and authorise the deployment of specialised security forces to protect designated 'strategic mining cluster' zones.

The law also reopened the national metallic mining concession registry — closed since 2018 — to medium- and large-scale applications, an event the International Monetary Fund had explicitly flagged as a precondition for Ecuador's fiscal recovery programme. The IMF's December 2025 Article IV review noted that Ecuadorian authorities had committed to reopening the metallic cadastre by late June 2026 and that a new fiscal regime for the sector was being developed with IMF technical assistance. Simultaneously, the law introduced a variable 3–8% royalty scale tied to commodity prices and project profitability, replacing a flat royalty structure and directly affecting the economics of existing operators like Lundin Gold, whose Fruta del Norte mine generated approximately $900 million in gold sales in 2025.

Against this backdrop, Ecuador's state miner ENAMI is now preparing an international tender for the Llurimagua copper-molybdenum project in Imbabura province — a 982-million-tonne resource capable of producing roughly 210,000 tonnes of copper per year over a twenty-seven-year mine life at an estimated capital cost of $3 billion. The tender follows the definitive exit of Chile's Codelco after an ICC arbitration tribunal concluded in July 2025, awarding Codelco just $25.3 million of its $567 million damages claim — below what the company had invested in exploration. With Chinese state-linked miners already controlling Ecuador's three largest undeveloped projects and Singapore's Boroo having quietly entered by acquiring the Emsaec concession portfolio, the Llurimagua bidding process is shaping up as a geopolitical contest between Chinese capital and Western-aligned financiers backed by US EXIM and DFC programmes announced in February 2026.

Why it matters for dispute formation

The law's core vulnerability is the gap between what it promises investors and what Ecuador's Constitutional Court has historically permitted. The Court has a documented record of nullifying executive instruments that regulate consultation by decree rather than by organic law: it struck down Executive Decree No 754, which purported to govern environmental consultation, on precisely those grounds. The 2026 law is itself an organic law, which closes that specific procedural route — but indigenous federations, led by the national confederation CONAIE, have signalled they will challenge the law's 'administrative silence' and 'security zone' provisions as violations of the free, prior and informed consent right entrenched in Article 57 of Ecuador's 2008 Constitution and in ILO Convention 169, which Ecuador has ratified. If the Constitutional Court grants precautionary measures or ultimately invalidates the FPIC provisions, every concession granted under the newly reopened registry becomes a contested title. The practical consequence for a company that has spent two to four years advancing a project under a concession subsequently voided is a stranded sunk-cost position with no clear administrative remedy and a treaty-arbitration path as the only credible recovery route.

The Llurimagua tender concentrates this risk acutely. The deposit's 2014 environmental licence was already judicially overturned for violations of nature-rights provisions and inadequate consultation. A new development partner will be required to secure a replacement environmental impact assessment and complete prior consultation processes with indigenous and campesino communities in Imbabura — communities that actively disrupted Codelco-era exploration and whose opposition has not abated. ENAMI's ability to deliver a clean title to an incoming JV partner is therefore constrained by the same Constitutional Court proceedings that threaten the broader registry. A bidder that signs a JV agreement before those proceedings resolve is effectively acquiring Codelco's former position: financially exposed to an unresolved social-licence deficit. The Codelco ICC outcome — $25.3 million awarded against a $567 million claim — illustrates how difficult it is to recover expectation damages from a state partner when the project did not reach production. An incoming partner starting from a weaker contractual baseline than Codelco's 2015 shareholder agreement faces an even narrower arbitration corridor.

On the operating side, the new royalty scale creates a structural dispute seed for existing concession holders who negotiated fixed-rate terms in their exploitation contracts. Ecuador's Mining Law grants stabilisation of the tax and royalty regime for the life of an exploitation contract once signed. Whether the new variable scale overrides those contractual terms — or whether it applies only to contracts signed after 2 March 2026 — is an open question that ARCOM and the Ministry of Energy and Mines have not yet formally resolved. Lundin Gold's Fruta del Norte exploitation contract, signed under the prior fiscal framework, is the test case. If the government asserts that the new sliding scale applies retroactively, Lundin holds a plausible investment-treaty claim under the Canada–Ecuador BIT; if the government confirms grandfathering, junior explorers moving towards exploitation under the new registry will face a higher royalty burden than established operators, distorting the competitive landscape and potentially creating a separate set of legitimate-expectation arguments.

Who's exposed

What to watch

• Constitutional Court ruling on CONAIE's challenge to the FPIC and 'administrative silence' provisions — a precautionary measure alone could freeze new concession grants under the reopened registry.
• ENAMI's formal Llurimagua tender launch: the pre-qualification round will reveal whether Western-backed bidders can compete with Chinese state capital on both price and risk tolerance for an unresolved social-licence position.
• ARCOM's official guidance on whether the variable 3–8% royalty applies to exploitation contracts signed before 2 March 2026 — the Ministry's position will determine whether Lundin Gold and other operating concessionaires have a stabilisation-clause dispute with the state.
• Boroo's in-country disclosure of its concession portfolio and any environmental or community-consultation steps it initiates, which will serve as an early test of how the market prices the new registry's legal durability.