MAC: Mines and Communities

Bolivian workers take over plant, threatening to unseat Atlas

Published by MAC on 2010-08-02
Source: Business News Americas (2010-07-15)

The recent occupation by Bolivian workers of a metal processing plant mirrors a similar spat between the government and Jindal - an Indian miner hoping to mine the country's huge El Mutun iron ore deposit.

In that case, too, the foreign company claims it hasn't been granted land necessary to proceed with the project and that the authorities have wrongfully cashed in its guarantees. See: http://www.minesandcommunities.org/article.php?a=10186

Bolivia's government recently said it would nationalise the country's mines, although it may not have the capacity to run them.

 

ESPAÑOL

APM to request dissolution of Karachipampa JV

Business News Americas

7 July 2010

Canadian miner Atlas Precious Metals (APM) will ask the Bolivian chamber of commerce to dissolve its JV contract with state miner Comibol over the latter's failure to meet the agreements for the reactivation of the Karachipampa plant, an APM executive told BNamericas.

"We will make this request as soon as possible, since each day we remain in Bolivia is a cost for the company and we want this to be resolved as soon as possible," APM's legal representative Betsy Miranda said.

In June 2005, Comibol and APM signed a JV agreement to reactivate the 51,000t/y plant to treat silver concentrates. APM has a 65% share and the Bolivian state holds the remainder.

Among the reasons for deciding to terminate the contract are the government's decision to cash in the company's surety bond, despite the fact that it expires in 2011, and the lack of land to construct sulfuric acid and zinc plants, according to the executive.

"We want to invest, but we don't have anywhere to do it," the executive said.

Comibol has not given APM the land necessary to build the plants, nor has it agreed to sell the company around 19Mt of mineral concentrate. "We offered to buy about US$20mn worth of concentrates and take them on as an investment, but the government hasn't wanted to sell us the material," the executive said.

Last week the Bolivian government cashed in a US$850,000 surety bond deposited by APM because of the delay in the reactivation of Karachipampa.

APM has a period of 44 months, starting in February 2008, to reactivate the plant in Oruro, but more than half of this time has gone by without any progress, prompting the decision to cash in the bond, an official from the mining and metallurgy ministry (MMM) told BNamericas last week.

The president of Comibol was not available for comment when contacted by BNamericas.


Karachipampa layoff could lead to criminal, labor proceedings

Business News Americas

15 July 2010

The employment termination notice that Canadian miner Atlas Precious Metals (APM) gave to the 90 employees working on the reactivation of the Karachipampa polymetallurgical plant in Bolivia's Potosi department could lead to criminal and labor proceedings, an APM executive told BNamericas.

"The company gave the notice because the government cashed the surety bond, leaving us with no possibility of continuing the project, and because we cannot keep single-handedly paying wages for a stalled project when we don't see one dollar in profits," APM's legal representative Betsy Miranda said.

Miranda was summoned by the labor ministry to explain the company's decision to give employees their termination notice. The ministry also demanded that the measure be reversed.

The company is not worried because it complied with the labor law, which requires that workers be given three months notice for employment termination, Miranda said.

Unilateral Agreement

In addition to cashing in the surety bond, the mining and metallurgy ministry (MMM) and state miner Comibol signed an agreement with the Karachipampa workers guaranteeing their job security, Miranda said.

"But APM didn't participate in that agreement and it's creating internal problems because now the workers, supported by that document, have taken over the plant and are threatening to kick Atlas out," Miranda said.

Last week, APM announced that it will ask the Bolivian chamber of commerce to dissolve its JV contract with Comibol for the latter's failure to fulfill the agreement for the Karachipampa plant's reactivation.

The companies are currently scheduling meetings to reach an agreement on the matter.

In June 2005, Comibol and APM signed a JV agreement to reactivate the 51,000t/y plant to treat silver concentrates. APM has a 65% share and the Bolivian state holds the remainder.


APM loses faith in agreement with Comibol for Karachipampa - Bolivia

Harvey Beltrán

Business News Americas

3 August 2010

Canada's Atlas Precious Metals (APM) does not believe it will be possible to reach an agreement with Bolivian state miner Comibol to reactivate the Karachipampa polymetallurgical plant, APM's legal representative Betsy Miranda told BNamericas.

"It's clear that Comibol is not willing to settle. The company is asking us to take out a new surety bond, but we want them to give us back the value of the bond they cashed in. This would open up the possibility of negotiation," Miranda said.

In July, the government cashed in a US$850,000 surety bond deposited by APM claiming the company should have already completed a good percentage of the project, although APM has a period of 44 months, starting in February 2008, to reactivate the plant in Potosi department.

After the government cashed in the bond, APM asked the Bolivian chamber of commerce to dissolve its JV contract with Comibol for the latter's failure to meet the agreements for the reactivation of the Karachipampa, such as not handing over land to build sulfuric acid and zinc plants.

The Canadian firm is also considering going to international arbitration for what it claims are a number of irregularities surrounding the hearing to create a tribunal and proceed with the dissolution of the contract with Comibol, Miranda told BNamericas in a previous interview. In addition, APM is upset by an agreement Comibol signed with workers, guaranteeing their jobs.

In June 2005, Comibol and APM signed a JV agreement to reactivate the 51,000t/y plant to treat silver concentrates. APM has a 65% share and the Bolivian state holds the remainder.

Political Interference

Although the national chamber of commerce should mediate an eventual agreement, "there is a lot of political interference, making it less objective," Miranda said.

APM will not take out a new bond, but it will continue with the settlement process, since they are different matters, Miranda said.

For now, there is no clear schedule for meetings between the parties to move forward and "the issue is still unresolved," she added.

Karachipampa was completed in 1983 at a cost of US$500mn but has not yet seen production.

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