April 29 (UPI) — Ecuador signed an agreement with Chinese mining giant CMOC Group Limited to develop the Cangrejos project, set to become the country’s first large-scale open-pit gold mine and its biggest gold and copper operation.

Through its subsidiary Odin Mining Ecuador, the Chinese company will invest more than $1.7 billion with plans to begin construction before the end of 2027.

The deal follows CMOC’s acquisition earlier this year of Canadian mining company Lumina Gold. Odin Mining Ecuador will now oversee construction and operation of the deposit, which is estimated to contain 11.6 million ounces of gold, 1.4 billion pounds of copper and 14.4 million ounces of silver.

In a statement released Tuesday, Ecuador’s Ministry of Environment and Energy said the Ecuadorian government will retain a 50% share of the project’s value, generating an estimated $4.386 billion in state revenue over the mine’s projected 26-year lifespan.

The government also expects to receive $54 million in advance royalties tied to project milestones.

Ecuadorian authorities said the operation is expected to create more than 1,200 direct jobs and generate hundreds of millions of dollars in early royalty payments, providing a major source of foreign currency for the country’s economy, according to local outlet Primicias.

The company also plans to build its own power generation plant to avoid affecting Ecuador’s national electricity supply.

The project is located in El Oro Province near the border with Peru, an area affected by drug trafficking organizations and illegal mining operations linked to the criminal group Los Lobos. Despite security concerns, Ecuador began large-scale mining production in the region in 2019, according to broadcaster NTN24.

Data from Ecuador’s Central Bank showed mining exports rose 35% between 2024 and 2025, increasing from $3.075 billion to $4.263 billion.

Analysts said the agreement has geopolitical implications beyond Ecuador. They said CMOC’s expansion into Cangrejos, alongside projects such as the Mirador Mine copper mine, strengthens China’s control over critical mineral resources in Latin America.

In response, the United States signed an agreement with Ecuador in February 2026 to secure supplies of critical minerals and rare earth elements. The deal aims to create alternative supply chains through initiatives such as the Mineral Security Partnership to reduce dependence on Chinese-controlled resources.

U.S. officials have expressed concerns that Beijing’s growing control over Ecuadorian gold and copper resources could weaken global supply chains tied to defense technology and the energy transition.

While Ecuador’s government welcomed the foreign investment, environmental and community groups raised concerns about large-scale open-pit mining in one of the country’s key agricultural regions.

Environmental organizations said the disposal of millions of tons of mining waste remains a major source of tension with nearby communities.

CMOC Group Limited, formerly known as China Molybdenum Co. Ltd., is one of the world’s largest producers of molybdenum, tungsten, niobium and cobalt.