June 16 (Bloomberg) -- Ecuador, which last month began seizing mining concessions from companies that didn't apply for new permits, plans to offer new licenses to help develop copper and gold deposits, the nation's strategic sectors minister said.
The government plans to auction new concessions and those seized in May after approving a national development plan and land reform, Minister Jorge Glas said yesterday in an e-mailed response to questions. He didn't provide further details. A concession is a grant of land made by a government allowing a company to explore for metals or oil on its territory.
Ecuador, South America's seventh-biggest economy, is trying to expand output and boost revenues through new contracts with miners, including units of Canada's Kinross Gold Corp. and Iamgold Corp., after the Andean country's legislature approved a new mining code in January 2009. The country has about 25.5 billion pounds of copper and 30 million ounces of gold, he said.
"Mining is a priority for the government," said Glas, who oversees the nation's mining, oil, and telecommunications industries. "We will work to ensure there are no delays in mining activity" when the laws are approved, he said.
The government revoked almost 3,000 licenses in April 2008 while it rewrote laws to increase state control over natural resources. Companies that didn't reapply for mining permits by May 10 had their concessions canceled, according to the Vice Ministry of Mines.
Enami EP, Ecuador's state-mining company created in January, will also begin exploring for gold, copper and molybdenum this year, the minister said. The government is holding talks with state-mining companies in China, Canada and South Korea to form joint ventures like the one it signed last year with Chile's state copper company Codelco, the world's largest producer of the metal, Glas said.
The government expects to increase oil production to about 489,000 barrels of oil per day by the end of the year, the minister said. That compares with an average 471,800 barrels per day in the first four months of the year, according to Central bank data. Ecuador, the smallest member of the Organization of Petroleum Exporting Countries, has an estimated capacity of 500,000 barrels per day, according to Bloomberg data.
President Rafael Correa last week repeated threats to seize oil companies' assets in a bid to accelerate renegotiations of oil-field contracts.