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U.S. mining firm given Bolivian assurance against nationalization

April 25, 2011 at 4:04 PM   |   Comments

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LA PAZ, Bolivia, April 25 (UPI) -- Bolivia has assured U.S. Coeur d'Alene Mines Corp. it isn't a target for nationalization while President Juan Evo Morales rules the country.

Despite its pressing need for foreign investment and experts, Bolivia has scared away international entrepreneurs by its often erratic and mostly unpredictable resort to nationalization of companies that are seen to have upset the Morales administration.

The reality of overseas investors being coy about investing in Bolivia contrasts with the government's strenuous efforts to brush up its image and attract foreign cash and expertise into the country's languishing infrastructure and under developed potential as a major exporter of minerals.

Coeur d'Alene said it received assurances from the Morales administration that its San Bartolome mine isn't subject to any proposed nationalization.

Humberto Rada, president of Coeur South America and Coeur Manquiri, the subsidiary of Coeur that operates San Bartolome, said the company had met with Bolivian Mining Minister Jose Pimentel and received assurances that Coeur Manquiri wouldn't be nationalized.

The meeting was also attended by members of the Federation of Mining Workers Trade Union, the company said.

Coeur has maintained that its property rights at San Bartolome aren't the subject of expropriation. The company, which has headquarters in Coeur d'Alene, Idaho, operates the mine in Potosi, a UNESCO World Heritage Site because of its silver wealth. Coeur said the title to the mine already belongs to Bolivia and is backed by a presidential supreme decree.

All surface mining and silver production at San Bartolome is operating as usual, said the company. The labor unions working with San Bartolome management have openly denounced any nationalization and expressed their support of Manquiri, said the company. It said the mining cooperatives in Potosi, "a strong social and political influence in Bolivia," had also opposed nationalization.

Coeur d'Alene Mines Corp. is the largest U.S. primary silver producer and a growing gold producer. The company also operates the Kensington gold mine in Alaska and Rochester mine in Nevada and owns non-operating interest in a low-cost mine in Australia. Exploration is under way in Argentina and Mexico.

Earlier in April, Bolivia's plans to nationalize mines owned by Pan American Silver Corp. and Swiss commodities trader Glencore International AG faced bitter opposition from the workers' unions.

Morales claimed he had received miners' support for state takeovers of mines sold to private investors in the 1990s. He has already nationalized or raised taxes on oil, natural gas, telecommunications and power companies.

Sinchi Wayra, a subsidiary of Glencore in Bolivia, operates zinc, lead and tin mines that were privatized by the country in the 1990s. Glencore's Vinto tin smelter was taken over by the government following allegations of corruption in the deal in which Glencore bought the plant.

Canadian company Pan American Silver bought the rights to the San Vicente project, which last year produced more than 3 million ounces of silver, in the 1990s from state mining company Comibol.

Topics: UNESCO
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