Bolivia may revoke mine contracts

[Judi Lynn]

Latest Update: Saturday 16/4/2011 April, 2011, 12:27 AM Doha Time

Bolivia may revoke mine contracts
Reuters/La Paz

Bolivia’s leftist government may rescind concessions on four mines run by Glencore affiliates and Canada’s Pan American Silver, the Andean country’s mining minister said on Thursday. Mining unions are asking the state to “recover” the silver, zinc, lead and tin mines currently operated by private firms, which would be in line with President Evo Morales’ drive to regain control over key natural resources since 2006.

Mining Minister Jose Pimentel said state-run Bolivia Mining Corp (COMIBOL) would assume control of the mines if the concessions were rescinded, a move described as “recovery, not nationalisation” that could happen before May 1.

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Pimentel said the government did not plan to target mining projects that have been private investments from the start, such as San Cristobal, the country’s largest silver mine, owned by Japan’s Sumitomo Corp.

“We respect the legal framework but we are also conscious that the whole privatisation process has had judicial pitfalls,” Pimentel said. Coeur d’Alene, which operates the San Bartolome silver mine in Bolivia, said it believes its operations in the country will not be impacted. Pan American’s San Vicente mine, located in the center of the silver-rich Potosi region, produced 3.0mn ounces of silver and 4,661 tonnes of zinc concentrates last year, according to the company’s website.Shares in Pan American fell as much as 11.3%, before recovering somewhat to close down 9.3% at C$35.89 on the Toronto Stock Exchange.

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