Ecuador: Correa replaces Uncle Sam with Uncle Chen

SALON.COM REPORTED: In January 2009, Correa reactivated hundreds of mining permits and granted foreign companies access to indigenous territory and resources in any projects he deemed “in the national interest.” All of this occurred just before the start of the Mining World Fair in Ontario, where Correa administration officials told the gathered, “In Ecuador, large-scale exploration has begun.”

The primary target for this message was and remains China. Ecuador is a serial defaulter with a radioactive credit rating, and Correa’s entire economic program is dependent on loans from China in return for wide access to its minerals. As in Venezuela and Bolivia, China has become a happy lender of last resort, offering Quito a credit line of up to $10 billion in long-term, low-interest loans collateralized with the stuff in the ground. Where Western development banks once attached strings of political, economic and regulatory reform, the China Development Bank wants the resources. Toward this end, China has become Latin America’s biggest banker with $75 billion loaned since 2005 — which is more than the World Bank, the IDB and the U.S. Export-Import Bank combined. Beijing’s top regional borrowers are Ecuador and Venezuela, where Hugo Chavez has described his nation’s oil as “at the service of China.” As of this writing, Ecuador’s debt to China approaches a quarter of its GDP.

Mirador is just one of a number of recent Chinese strategic investments in Latin American mineral reserves. The firms Zijin, Minmetals and Chinalco have snatched up the largest copper mines in Chile, Peru and Mexico. But Mirador is the prize. The concession is estimated to hold up to 11 billion tons of copper, with a large secondary store of gold. Adding another layer of strategic depth to the holding, the contract includes rights to the waste rock, possibly a signal of Chinese expectations that the site contains uranium and even molybdenum, a coveted rare earth suggestive of Avatar’s unobtainium. Even before estimates had been made of Mirador’s bounty, Chinese gentlemen are said to have lurked among Zamora’s dirt-floor provincial gold markets, examining bags of rock and sand brought in by small-scale miners in rubber boots, who understood the Chinese had interests beyond their ……. Read Article