Ecuador Inks US$1.7 Billion Deal with CMOC to Develop Los Cangrejos Gold

Ecuador has finalized a US$1.7 billion mining contract with China’s CMOC Group (OTC Pink:CMCLF) Group to develop the Los Cangrejos gold and copper deposit, according to a Reuters report.

The agreement, signed with CMOC’s local subsidiary ODIN Mining del Ecuador, is expected to transform the site in the southwestern El Oro province into the country’s third large-scale mining operation.

According to Ecuador’s energy ministry, the 26-year open-pit development will generate an estimated US$4.39 billion in state revenue over its lifespan through a combination of taxes, royalties, and structural fees.

Under the negotiated terms, the Ecuadorian state retains a 50 percent share of the project’s total value. Furthermore, Quito will receive US$54 million in advance royalties, with an initial US$34 million paid upon signing. The remaining US$20 million is tied to future construction milestones, including the commencement of both the processing plant operations and active mining.

The Los Cangrejos agreement signals a potential turning point for an Andean mining sector that has been hampered by shifting regulations, litigation, and fierce community opposition.

Currently, Ecuador relies on just two large-scale operations:Lundin Gold’s (TSX:LUG,OTCQX:LUGDF) Fruta del Norte and the Chinese-backed Mirador copper mine, both of which entered commercial production in 2019.

The Noboa administration, which secured a full four-year term in April 2025 following a snap election victory in late 2023, has positioned mining as a primary engine for economic stabilization.

To clear the backlog of delayed projects, the government pushed through a comprehensive new mining law in late February.

The legislative overhaul is designed to streamline a permitting timeline that previously stretched up to two years, introducing “environmental authorization” system while setting royalty rates between 3 and 8 percent of sales and redirecting a majority of those proceeds directly to local municipal governments to help assuage community resistance.

Noboa has also committed to bolstering state security in mineral-rich regions and cracking down on illegal mining operations.

CMOC acquired the Los Cangrejos asset through its 2025 acquisition of Lumina Gold in a US$420 million all-cash transaction.

Located approximately 450 kilometers southwest of Quito, the site is touted as the largest primary gold deposit in Ecuador. Based on a 2023 pre-feasibility study, the scale of the deposit positions it as a globally significant asset.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.