Ecuador court rules against community consultation for Cascabel mining project

QUITO, June 20 (Reuters) - Ecuador's Constitutional Court on Thursday ruled against a request to require community consultations for a planned mining project, allowing Australia's SolGold to move forward with developing its Cascabel copper, gold and silver mine.

The project is in the advanced exploration phase and is one of the most ambitious mining projects in Ecuador, which hopes to develop mineral resources to spur its sluggish economy and wean dependence on crude oil exports.

But local communities in the northern Imbabura and Carachi provinces had asked the court for permission to hold a popular referendum on whether or not to allow the development to go forward. Activists have expressed concern about the mine's impact on the environment and sources of potable water.

In its ruling, the court said such a popular referendum was incompatible with the Andean country's laws.

"The court verified that the proposal to call a popular referendum under constitutional control does not meet the requirements for clarity and precision that the law demands," the court wrote.

The decision is a victory for President Lenin Moreno, who is seeking to boost foreign investment in Ecuador after a decade of populist rule under leftist predecessor Rafael Correa. Moreno had warned the court about the consequences of authorizing consultations for mining areas that already have awarded licenses to foreign companies.

In March, a popular referendum in Azuay province went against a planned gold mine to be developed by INV Metals Inc , prompting the Canadian company to seek to relocate the project.

A preliminary study of Cascabel shows it could become one of the world's largest mines of its kind, with mineral reserves of 10.9 million tonnes of copper and more than 23 million ounces of gold,

Neither Ecuador's Energy Ministry, which oversees the mining sectors, nor representatives of the Imbabura and Carachi communities immediately responded to requests for comment. (Reporting by Alexandra Valencia Writing by Luc Cohen Editing by Leslie Adler)