Loma Larga copper and gold project hit by permit revocation in Ecuador

Loma Larga Cu

Ecuador’s decision to revoke the environmental license for the Loma Larga copper and gold project has thrown a flagship Andean mine into uncertainty. The Loma Larga copper and gold project, controlled by Canada’s Dundee Precious Metals, was classified as strategic by the government but now faces a full permitting reset. As a result, investors in copper and gold are reassessing political and regulatory risk in Ecuador just as the country seeks to grow its mining sector.

Water concerns and local politics stall a strategic mine

The core dispute around the Loma Larga copper and gold project centres on water protection in Azuay province. Local authorities in Cuenca and the Azuay prefecture have published studies warning that underground mining could threaten key water sources. Consequently, the newly merged environment and energy ministry used these findings to justify revoking the project’s environmental permit.

Dundee insists that the Loma Larga copper and gold project complies with national environmental standards and includes robust mitigation measures. However, local opposition has been organised for years, reflecting broader social resistance to high-altitude mining in sensitive watersheds. This clash between national development priorities and regional concerns now risks becoming a test case for how Ecuador balances resource extraction with environmental and social safeguards.

Investor confidence and Ecuador’s copper growth ambitions at risk

The permit revocation raises questions about the stability of Ecuador’s mining policy and its ability to attract long-term capital. Mining industry leaders warn that cancelling the license for the Loma Larga copper and gold project may set a damaging precedent for other large deposits. Investors already face geological, infrastructure and price risks; added regulatory reversals may push some to favour neighbouring jurisdictions such as Peru or Chile.

Meanwhile, Ecuador’s copper concentrate exports continue to grow, underscoring the country’s ambition to scale up production. Yet without clarity over permitting and community consent processes, future projects could be delayed or downsized. For copper and gold supply chains, the episode highlights how local governance and social licence can disrupt even “strategic” assets in emerging mining regions.

The Metalnomist Commentary

The Loma Larga decision is a sharp reminder that environmental legitimacy is now as critical as ore grades and capex in mine development. If Ecuador wants to unlock its copper and gold potential, it must establish predictable, transparent rules that reconcile local water concerns with national growth goals. Otherwise, high-quality deposits may remain stranded, and capital for critical minerals will flow to more predictable jurisdictions.