Chile’s copper miner, Codelco has initiated an international arbitration process to reach a mutually beneficial agreement with Ecuador’s state-owned miner (Enami EP) to develop the Llurimagua copper mine project. Codelco has requested the intervention of the International Chamber of Commerce (ICC) in Paris.
Despite various agreements between Codelco, Ecuador and Enami EP the expansion work at the project is stalled. Codelco seeks to resolve the controversies through international arbitration to safeguard its interest and investments made in the copper mine.
The Llurimagua copper mine is located in Imbabura province, 80km from Quito, the capital of Ecuador. In 2008, a binational agreement was signed between Chile and Ecuador which included activities of interest to the two parties. Subsequently, multiple agreements were signed between Ecuador, Chile and the two companies including shareholders agreement for Llurimagua and various terms and milestones. In 2019, Codelco and Enami EP entered definitive terms for the partnership. But despite Codelco fulfilling its part of the obligations and making investments, Ecuador failed to comply with the agreements.
The expansion of the copper project has faced resistance from locals due to environmental concerns. In August 2020, media reports suggested that Enami EP is keen to sell its 51pc share in the Llurimagua project to Codelco, which was not interested in buying the same. Codelco owns the remaining 49pc share in the project.