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Friday, November 21, 2008

Ecuador withdraws mining concession from Canadian firm

Quito, Nov 20, 2008 (EFE) - The Ecuadorian government decided to withdraw the mining concession it had extended to Canadian firm Ascendant Copper S.A. because of failure to fulfill legal requirements associated with the deal, officials said.

The Regional Mining Directorate of Pichincha province, the capital of which is Quito, said that the company failed to fulfill several requirements before the concession was awarded.

Ascendant "did not carry out the prior consultation" with the residents of the communities where it was going to operate, The Mines and Petroleum Ministry said, adding that the "environmental impact study it presented to be awarded (the concession) was declared 'unable to be processed' in December 2006."

The statement released by the Regional Directorate "is based on Article 1 of the Mining Mandate" issued by Ecuador's Constituent Assembly last year.

The resolution withdrawing the concession establishes that the firm must "declare the extinction without any economic compensation of all mining concessions that, in the exploration phase, have not made any investment in the development of the project."

The areas Golden 1 and Golden 2 in which Ascendant Copper operates encompass nearly 5,000 hectares (12,500 acres), the ministry's report said.

The withdrawal of the concession comes as lawmakers are analyzing a controversial mining bill sent to them by the government of President Rafael Correa.

Environmentalists and Indian groups say that the new law will allow pollution and will privatize the lands, while the state asserts that the exploitation of mineral reserves will be carried out in a responsible way.

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