Ecuador has approved a new mining law that aims to expedite the development of small and medium-scale projects and attract more investments into the country.

The new legislation introduces a cap of 8% on mining royalties for exports of copper, gold and silver, reported Reuters.

According to the new mining law, small-size mines should pay 3% in royalties, while medium-size and large-scale projects will have to pay a minimum of 4% and 5% royalties, respectively.

The law also aims to remove red tape, allowing investors to speed up the development of their projects. It imposes heavy penalties on illegal miners, while strengthening the environmental protection policies.

In addition, the mining law is expected to simplify the investment terms by delaying the introduction of the windfall tax until the mining companies recover their investments. The windfall tax had prompted companies like Kinross Gold to pull the projects in the country,