Bolivia Backpedals On Glencore, Pan American Mine Takeovers
First Published Wednesday, 20th April 2011 02:01 pm - © 2011 Dow Jones
Dow Jones NEWSWIRES
Bolivia's plans to nationalize mines owned by Pan American Silver Corp (PAAS) and Swiss commodities trader Glencore International AG appear to have hit a snag, with workers' unions at the two companies rejecting the move.
The government has said it would not move forward with taking over the mines if the unions opposed it.
The idea has been discarded because the unions don't want any change, vice minister of mining development Hector Cordova told Radio Fides late Tuesday.
However, an official decision has not been made yet and mining minister Jose Pimentel was meeting with president Evo Morales Wednesday, mining ministry spokesman Alfredo Zaconeta said in a telephone interview. An official announcement is expected later in the day, he said.
Last week, Morales said something had to be done about miners' demands that the state "reclaim" mines that were sold to private investors in the 1990s.
Morales, has greatly expanded government control over the economy since he took office in 2006. During that time, he has nationalized or raised taxes on oil, natural gas, mining, telecommunications, and power companies.
Glencore's Bolivian subsidiary Sinchi Wayra runs the Colquiri, Porco and Bolivar zinc, lead and tin mines, which were privatized in the 1990s. In February 2007, the Morales administration seized Glencore's Vinto tin smelter following accusations of corruption involving the sale of the plant to Glencore and claims that the company failed to conduct the maintenance stipulated in its contract.
The company and government have been locked in a bitter dispute ever since, with each side claiming that compensation is owed by the other.
Canada's Pan American Silver bought the rights to the San Vicente project from state mining company Comibol at the end of the 1990s. In 2010, Pan American produced more than 3 million ounces of silver at the San Vicente mine.
Pan American Silver is the world's second-largest primary silver producer and has a number of mining operations across Latin America. Its San Vicente mine produced about 12% of the 24.3 million ounces of silver it mined last year.
-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738; firstname.lastname@example.org