UPDATE 1-Bolivia says mining companies have nothing to fear http://today.reuters.com/news/articleinvesting.aspx?type=companyNews&storyid=264976+16-Oct-2006+RTRS&WTmodLoc=InvArt-L2-CompanyNews-2
Mon Oct 16, 2006
(Adds stock prices, comment from Coeur, paragraphs 5-13; adds byline)
By Carlos Quiroga
LA PAZ, Bolivia, Oct 16 (Reuters) - Bolivia's leftist government said on Monday foreign mining companies have nothing to fear from a plan to revitalize the country's dilapidated mining industry, the state news agency reported.
Soon after his appointment earlier this month, new Mining Minister Guillermo Dalence said he would announce the mining plan on Oct. 31 on the principle "of returning to the Bolivian state the unrestricted use of all natural resources".
But Vice President Alvaro Garcia on Monday ruled out expropriations and assured private companies with investments in the country the rule of law would be respected.
"The private investor has no need to worry," Garcia said. "(The state mining company) COMIBOL is going to be revitalized. The president is working on that but private investment, foreign and local, that invests and that generates jobs, won't be touched," Garcia was quoted as saying by news agency ABI.
He made the remarks a day after President Evo Morales told peasant farmers in a speech there would be "surprises" in relation to the mining of gold, silver and tin.
"These minerals have to pass to the Bolivian state under the social control of the Bolivian people. I know that's the next urgent step we have to take," Morales was quoted as saying by local daily La Razon.
Stocks of companies with mines and projets in Bolivia lost ground on Monday. In Toronto, Apogee Minerals Ltd. (APE.V: Quote, Profile, Research) fell 6.5 percent to 58 Canadian cents. Orvana Minerals Corp. (ORV.TO: Quote, Profile, Research) fell 3 percent to 67 Canadian cents.
Apex Silver Mines Ltd. (SIL.A: Quote, Profile, Research), which is developing the San Cristobal silver and zinc project in Bolivia, lost 4 percent to $14.10 on the American Stock Exchange and Coeur D'Alene (CDE.N: Quote, Profile, Research) eased 3 percent to $4.66 on the New York Stock Exchange.
San Cristobal, with an investment of some $600 million, will be the world's third-biggest silver mine.
ENERGY NATIONALIZED
Since it took office in January the government, which nationalized the energy sector in May, has said it planned to reform the country's mining code, but has repeatedly ruled out expropriations.
Coeur d'Alene, which is developing the San Bartolome silver project in Bolivia, said talk of nationalization was a "non-issue".
"The issue seems to be that the government of Bolivia wants to take control of the mineral resources in the country that they do not already own," Coeur spokesman Scott Lamb said.
"This issue periodically surfaces in news reports. In the case of San Bartolome, the government already owns the mineral resource. We simply lease these rights from the government. As a result, we think talk of "nationalization" is a non-issue for San Bartolome."
But the government's drive to shake-up the mining sector appears to have gathered steam since violent clashes between rival tin miners killed 16 people earlier this month.
Morales sacked his last mining minister in early October for not anticipating the violence at the Huanuni tin mine -- one of the biggest in the world.
State-employed miners and members of independent mining cooperatives fought with dynamite at the mine, following a long-running dispute over its mineral riches.
Mining remains an important part of the economy in South America's poorest country and mineral exports brought in some $500 million last year -- nearly a fifth of total exports.
(With additional reporting by Rachelle Younglai in Toronto)
© Reuters 2006. All Rights Reserved.