During 2021, Fruta del Norte generated exports of $750 million and tax payments of $140 million. Production is growing.
Ecuador still has a mining sector incipient. Since the end of 2019, two mines big: lookout and fruit of the north. Despite this, in 2021, exports from minerals they added up to $2,902 million, which made this sector the fourth most important within national foreign trade.
More than 25% of that amount was generated in fruit of the northwhich is located in the small parish of Los Encuentros, Yantzaza canton, in Zamora Chinchipe.
Until 2025, it is expected that the export contribution of mining exceed $4 billion annually.
The main economic figures behind the operation of this project are detailed below.
1.- Production started on November 14, 2019after 14 years of exploration and construction phases of the mine. fruit of the north is one of the two mega mines in Ecuador along with lookoutLocated in Zamora Chinchipe.
2.- Before taking a single ounce of gold, the dealership Lundin Gold invested more than $1,000 million in the development of the project. Of that total, $923 million were allocated to the construction of a subterranean mine shallow (150 and 400 meters).
3.- So far they have been detected Bookings for 5.42 million ounces of gold. These reserves are enough to operate until 2036, with an average production of 340,000 ounces per year.
4.- A bell-shaped production is projected. That is, first a growing phase and then a declining phase, as long as no more reserves are found. From 2020 to 2021, it went from 242,400 to 428,514 ounces of gold. For this 2022, the goal is to exceed the figures achieved in the first two years.
5.- In fruit of the north It is not pure gold ingots that are extracted, but two intermediate products. On the one hand, doré bars that they are a mixture between gold and other minerals; and gold concentrate which is when the extracted rocks become a kind of paste.
6.- Each ounce of gold produced costs between $860 and $930. On average, for every ton of rock and earth mined, 0.30 ounces of gold are obtained. In 2021, 1,415,634 tons of material were needed to extract 428,514 ounces of gold.
7.- Last year, fruit of the north it represented 82% of all of Ecuador’s gold production. In total, $750 million of mining exports from that project, which is about $1,750 for each ounce of gold.
8.- Nathan Monash, Vice President of Business Sustainability at Lundin Gold, explained that at least 50% of the rent (income minus costs) goes in payments to the State: 5% of the income goes to royalties; then comes the income tax, VAT, foreign exchange, among other fees and contributions. In 2021, the project paid $140 million to the Ecuadorian treasury.
9.- Before drawing a solo ounce of goldbetween 2015 and 2019, fruit of the north paid taxes for $187 million only in the Yantzaza canton, Los Encuentros parish (location of the project).
10.- Until 2036, it is estimated that the mine pay more than $1.544 million in taxes directly to the State. However, this amount could increase according to the international price of the ounce of gold and to the discovery of more reserves.
11.- Every day, 7 to 8 trucks leave with ounces of gold of the mine in the Los Encuentros parish (Zamora Chinchipe) to Guayaquil for export. A company is contracted for this transport.
12.- Currently, the project generates more than 1,700 direct jobs. Of this total, 842 people are inhabitants of the area where the mine, 685 employees come from the rest of Ecuador and 177 collaborators are foreigners. To this must be added an additional 732 people who work with the project’s suppliers of goods and services.
13.- The average monthly salary in the Yantzaza canton grew more than 110% since 2015. The presence of fruit of the north caused the salary of a formal job to go from $653 to $1,405.
14.- Until 2036, the mine plans to make purchases from all kinds of suppliers throughout the country for $2.8 billion. Of that total, more than $960 million will go to companies in the Zamora Chinchipe. One of the largest contracts is for catering, which is received from the business of five former employees of fruit of the north.
15.- Fruta del Norte represents 0.3% of the Gross Domestic Product (GDP). Although it is considered as a mega mine In Ecuador, the project is large, but not on the same scale as other initiatives in countries with a more developed sector such as Chile, Peru or South Africa. (JS)
