Mining was only a very small part of Ecuador’s economy right up until the mid-1980s, employing around 7,000 people and contributing less than one percent to their GDP in 1986. Incomplete explorations and the inaccessibility of the mineral rich regions severely hampered mining operations. Although it was believed that Ecuador had strong reserves of gold, silver, zinc, copper and more. Only limestone was mined in any scale, supplying local cement works. The mining industry in Ecuador is still in its infancy, with large unexplored areas that are potentially rich in gold, silver and copper.
Gold remained an afterthought after the initial exploitation of the sixteenth century, but found new focus in the 1980s following the Ecuadorian Congress’ passing of a new law to encourage exploration and foreign investment into the mining industry. By the end of the 80s Ecuador was exporting two and a half tons of gold per year.
The 1985 law offered lower tax rates and greater financial incentives for investors, simplifying regulation and establishing the Institute of Minerals, under the Energy Ministry.
Further mining reforms took place in 2000 and 2009, however these increased the levels of bureaucracy and costs to investors, resulting in a contraction of the industry and a halt on new project development. Ecuador saw the least foreign direct investment per capita of all the countries in Latin America, according to the United Nations.