BUENOS AIRES (miningweekly.com) - After three months of negotiations, the president and vice-president of Chilean copper-miner Codelco flew to Ecuador on Thursday to meet with President Rafael Correa and sign a cooperation agreement on mining exploration and development.

The pact, which covers an initial four years and could be renewed for more periods, allows Codelco to explore the geology of specific mining sites that are currently under Ecuadorian control.

“We are very satisfied with this step we have taken, that is the beginning of a joint development project, together with the government of Ecuador,” Codelco president José Pablo Arellano said in a statement.

Codelco, which is owned by the Chilean government and is the world's biggest copper producer, will provide an initial capital injection of $1-million to fund the first stage of the agreement, at a time when Ecuador is interested in exploring its mining potential.

To date, the country had been focused on exploiting the production of oil.

According to the pact, once Codelco finds one of the mining sites interesting, a public private joint-venture (JV) company will be formed.

This is the third Latin American country where the government-owned Codelco will operate, after Mexico and Brazil.

However, Chilean newspaper El Mercurio reports that Codelco plans to enter another new market between 2009 and 2010, citing unnamed sources.

Ecuador authorities started looking for strategic partners to develop a mining industry in the country after a new mining law was passed on January 15.

The law announces, among other things, the creation of a State-owned mining company.

The agreement signed this week is the second exploration deal between Chile and Ecuador. In 2008, the nations initiated the creation of a joint venture to explore and exploit hydrocarbons in the southwest region of Ecuador.

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