Bolivia to seize mineral refinery

Section:

By Carlos Valdez
Associated Press
via Yahoo News
Thursday, February 8, 2007

http://biz.yahoo.com/ap/070208/bolivia_mining_nationalization.html?.v=3

LA PAZ, Bolivia -- President Evo Morales said Thursday he would nationalize a mineral processing plant owned by the Swiss mining company Glencore International AG, the first step of his plan to take control over a larger share of Bolivia's mineral wealth.

Morales did not state the terms under which his government would take over the Vinto plant on the outskirts of the city of Oruro, 110 miles southeast of La Paz.

But the president said the plant would be nationalized by a decree to be issued Friday, saying there had been a lack of transparency in its financial dealings without providing details.

"Companies that respect Bolivian laws, that do not steal money from the Bolivian people, will be respected," Morales said Thursday to community leaders in Oruro ahead of the city's Carvinal celebration next week. "But if the companies do not respect the laws, I have no other alternative than to recover those companies."

Offices of Glencore's Bolivian affiliate Sinchi Wayra were closed Thursday evening and company officials could not immediately reached for comment.

The announcement marks the first step in Morales' plans to nationalize Bolivia's mining industry, though how the process will continue still remains unclear.

All of Bolivia's extensive mineral deposits are already owned by the government, which operates a handful of mines through the state mining company Comibol. The rest are mined through concessions granted by the state to independent miners' cooperatives or international companies, including Glencore and U.S.-based companies Coeur d'Alene Mines and Apex Silver Mines Ltd.

Rising international metal prices, fed in part by demand from China, doubled the value of Bolivia's mineral exports to more than $1 billion last year from $547 million in 2005. The metals -- mostly zinc, silver, gold and tin -- together represent Bolivia's largest export after natural gas.

Despite the sharp increase, the Bolivian government collected only $45.5 million in mining taxes last year. Morales has proposed a tax hike that aims to boost the government's take to as much as $300 million.

Earlier this week more than 20,000 members of independent miners' cooperatives marched into the capital of La Paz to protest the tax increase, hurling dynamite and blocking traffic in the city center. Morales agreed to freeze the miners' taxes and instead direct the tax hike at larger private mining companies operating in Bolivia.

The Vinto plant -- which refines ore containing tin, lead, and silver -- has a strong symbolic value in Bolivia. After its 1996 privatization, the plant was bought by Comsur, a private mining company whose largest stockholder at the time was former Bolivian President Gonzalo Sanchez de Lozada.

Lozada fled Bolivia in October 2003 during riots against his administration, and is still sought by the Bolivian authorities in connection with a crackdown on the protests that left more than 60 Bolivians dead.

Glencore bought the plant from Comsur in 2004.

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