The Government of Ecuador has reportedly withdrawn the environmental licence previously issued to Canadian mining company DPM Metals for the Loma Larga gold project, which is located in an environmentally sensitive region. 

The move comes after mounting opposition from local residents and authorities, who warned that the project posed risks to the Quimsacocha water reserve and could threaten community health. 

The Quimsacocha seserve, covering more than 3,200 hectares, is part of the Andean "paramo" ecosystem, a crucial highland moor. Its springs are a key water source in the South American country, reported Reuters. 

The Environment and Energy Ministry said that this decision was made after technical reports were submitted by Cuenca and Azuay authorities, which are responsible for managing the region’s water systems. 

The ministry said: “The national government reaffirms its commitment to the rights of nature, the defence of water sources, and, under the precautionary principle, the protection of the health and well-being of the people of Cuenca and Azuay.” 

Cuenca Mayor Cristian Zamora, a leading opponent of the project, expressed gratitude to national authorities for revoking the licence, calling it the result of a long struggle to safeguard local water resources.  

DPM, which acquired Loma Larga in 2021, did not respond to requests for comment, reported the media outlet. 

According to DPM, the Loma Larga project was set to attract $419m (C$584.83m) in investments, with an average annual production of 200,000oz of gold in its initial five years. 

In August, Ecuador suspended project activities pending an environmental management plan, despite initially granting a construction licence.  

Although known for its gold and copper deposits, Ecuador has stopped mining projects due to local opposition and legal rulings, with only two mining companies currently operating in the country.