Mining exports outperform banana exports in terms of value.

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Bananas and plantains, a typical export from Ecuador, dropped to third position in February due to the value of mining exports.

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According to the Central Bank, the value of mining exports reached a closing of USD 334 million in February, a 41% increase over the same month last year.

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According to the February data, mining has displaced bananas and plantains to take third place in value, after shrimp and oil.

Regarding outside sales, mining first exceeded the banana industry in April 2022.

In June, August, and September of last year, mining also succeeded in displacing bananas and plantains from third place in terms of value.

And it’s not because exports of bananas and plantains have decreased; they were worth USD 329 million in February 2023, or 1.2% more than in the corresponding month of 2022.

What motivated mining?

With the large-scale projects Mirador (copper) and Fruta del Norte (gold), industrial mining began in Ecuador in 2019. This marked a before and after for the industry.

Mara Eulalia Silva, executive president of the Ecuadorian Chamber of Mining, notes that a mine begins operating at a partial capacity after the third or fourth year of operation.

The biggest increase in mining exports happened in 2021. The sector shipped more than USD 2 billion worth of goods abroad in that year, and it was also the first time the two mines ran continuously since shutdowns caused by the Covid-19 outbreak occurred in 2020.

At least 75% of the mining industry’s USD 2,775 million exports in 2022 might be attributed to industrial mining.

high level of metals demand

According to Silva, the global economic recovery following the pandemic has increased the demand for metals.

The widespread use of clean energy also suggests a higher need for metals.

“Without metals, there can be no energy transformation. A fossil fuel vehicle uses four times as much copper as an electric vehicle. The production of energy requires copper, according to Maria Eulalia Silva.

According to the Ministry of Energy, copper, and its concentrate accounted for 46% of all mining exports in 2022 and had a value of USD 1,163 million.

The Mirador mine near Zamora Chinchipe, run by the Chinese company Ecuacorriente, provided most copper and copper concentrate.

The next item is gold and its concentrate, which accounts for 30% of mining exports and has a value of USD 748 million.

Most of that gold matches the output of the massive Fruta del Norte mine in Zamora Chinchipe. Lundin Gold of Canada owns the mine.

Silva predicts that Mirador and Fruta del Norte output will increase slightly this year and the following year, noting that only 8% of Ecuador’s area has been explored.

upcoming investments

According to Silva, three projects are nearly prepared to begin the mine-building phase, which would require an expenditure of almost USD 1,000. There are, however, delays.

According to a 2021 Constitutional Court decision, the State must adhere to an environmental consultation and a pre-legislative consultation with the nearby community before a project obtains an ecological license in any of its phases.

Executive Decree 604, which governs pre-legislative consultation, has come under fire from the Confederation of Indigenous Nationalities of Ecuador (Conaie) and the Confederation of Indigenous Nationalities of the Ecuadorian Amazon (Cofeniae).

The organizations believe that the Executive is attempting to regulate a constitutional right through the decree by using a lower-ranking standard, endangering a genuine Native American involvement in the consultation.

Rise in banana prices.

According to the ECB, banana, and plantain exports totaled USD 709 million between January and February 2023. This industry continues to rank third overall in the nation’s exports.

Fruit exports increased by 9.8% in value throughout the two months due to higher spot prices brought on by high demand over the winter in the northern hemisphere. Richard Salazar, executive director of the Association for the Marketing and Export of Bananas (Acorbanec), explains this.

The increase was 8.6% in volume, according to the ECB. Acorbanec, however, is different from that figure. According to projections, the sector will have a 0.5% decline from January to February 2023 compared to the year before.

The said fall reacts to climate variables. According to the organization, 66.8 million cartons weighing 18.14 kg apiece were exported during the year’s first two months.

Of that volume, 23% went to Russia and 32% to the European Union.

In other words, despite the conflict, Russia is still Ecuador’s largest banana export market.

According to Salazar, the battle’s logistical issues were rapidly resolved. As a result, in 2022, exports to Russia only decreased by 2%.

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