Expert: Nationalization of mining could be tough for govt - Bolivia
Published: Tuesday, October 17, 2006 17:59 (GMT -0400)
Bolivian President Evo Morales' announcement that the state will assume control of mining is no surprise, but achieving that goal could be difficult, an official at the UN's Economic Commission for Latin America and the Caribbean (Cepal) told BNamericas.
"President Morales has been clear from the moment he announced his candidacy about what should be done with mineral properties in Bolivia, so there is no surprise," said Eduardo Chaparro, an official of Cepal's department of natural resources and mining.
In a speech over the weekend, Morales said that mineral resources such as tin, silver, and gold should be controlled by the Bolivian state. "This is the next step that must be taken urgently," Morales told local press.
Details about the process will be announced October 31.
However Chaparro believes there may be some difficulties pushing the decision through because not all of the country's mining sectors "share the President's opinion or his definition of nationalization."
Chaparro also believes that the process lacks definition on several issues, including whether the mining authority will be strengthened, whether state mining corporation Comibol will play a major part and what part it will play.
"It is also necessary to define how small miners will be financed. Does nationalization imply that small miners will have their mining permits withdrawn? How will the process work?" he said.
UNCERTAINTY
President Morales' announcement rekindled uncertainty in Bolivia's mining sector, as there are "currently two sectors opposed to nationalization" in the country, a sector executive who asked to remain anonymous told BNamericas.
One opposition group is the cooperative miners "because it is not in their best interests, and another is the wage-earning sector that works on investor projects, which is also not interested in going back to the old Comibol system," said the executive.
Another cause for concern is the diversity of existing mining contracts in Bolivia, the executive added.
"There are companies that have JV agreements with Comibol and there are other companies working on state-awarded concessions which are administered by Comibol."
As such, Cepal's Chaparro said, "The government has always ensured foreign investment. We have known that this has been President Morales' intention."
Companies operating Comibol-awarded concessions include Sinchi Wayra with several zinc, lead, tin, gold and silver mines, Inti Raymi at the Kori Kollo gold concession, and Denver-based Apex Silver (Amex: SIL) at the San Cristóbal polymetallic project.
Companies that share JV contracts with Comibol include Canada's Pan American Silver (TSX: PAA) which operates the San Vicente project in Potosí, and US company Coeur d'Alene Mines (NYSE: CDE) at the San Bartolomé project.
By Harvey Beltrán
bnamericas.com |
