MAC: Mines and Communities

Bolivia: to nationalise or not?

Published by MAC on 2012-06-19
Source: Reuters,, Merco Press, BN Americas

Conflict has erupted in Bolivia between miners working for Glencore, and others who approve the government's recently-announced intention to nationalise the London-listed company's zinc and tin operations.

Meanwhile, India's Jindal steel conglomerate appears to have confirmed it will withdraw from the country's largest new minerals project, repeating claims that it received a raw deal from the Morales administration.

So far the company hasn’t  threatened to go to international arbitration.

Is that just a matter of time - or does Jindal feel it's on somewhat shakey ground?

Violence flares in Bolivian Glencore mine dispute


15 June 2012

La Paz - Clashes between rival miners broke out at a Bolivian tin and zinc mine owned by global commodities giant Glencore late Thursday and at least 15 people were hurt, local media reported Friday.

The violence at the Colquiri mine, located about 200 kilometers (125 miles) south of the administrative capital La Paz, followed a two-week standoff at the mine where members of independent mining cooperatives were demanding new areas to work.

A similar battle for control of the state-owned Huanuni tin mine ended in clashes that killed 17 people six years ago.

State news agency ABI and radio station Erbol reported the violence broke out at about 8 p.m. local time Thursday when employees of Glencore's Sinchi Wayra unit and local residents tried to take back control of the mine.

There were unconfirmed reports that one person was killed during Thursday's unrest, which followed several days of government-led negotiations that failed to get an agreement over the future of the mine.

Sinchi Wayra's miners are calling for state mining company Comibol to "nationalize" the mine, which is owned by Comibol and operated by Sinchi Wayra under license, or restore state control to day-to-day operations.

Members of the cooperatives, however, want to maintain the current arrangement and get access to new areas of the site.

The leftist government of President Evo Morales, which has increased state control over energy and mineral resources, proposed restoring Comibol control to part of the site and leaving the rest for the cooperatives, but neither side agreed.

"We don't want another Huanuni, where 17 people were killed and 40 injured because of a similar problem. The government has to act and ... give all natural and strategic resources back to the state," said Mining Federation leader Cecilio Gonzales.

A representative of the cooperatives, Albino Garcia, blamed the government for the conflict, saying officials had "failed to respect agreements to preserve the areas granted to the cooperatives."

Colquiri, which is one of three mines operated by Sinchi Wayra subsidiary in Bolivia, produced 2,000 tonnes (2204.62 tons) of tin concentrate last year, according to Comibol data.

(Reporting by Carlos Alberto Quiroga; Writing by Helen Popper; Editing by John Picinich)

Bolivia to decide Canadian South American Silver mine's future based on indigenous referendum

By Cecilia Jamasmie

1 June 2012

Bolivia's President Evo Morales announced he will consult the indigenous communities of the Altiplano before authorizing the eventual exploitation of the silver and indium deposit of Mallku Khota, currently under exploration by Canadian South American Silver

The authority made ​​the announcement on the third day of the march led by indigenous [peoples], who departed from the southern department of Potosi, where South American Silver mine will be located, towards the nation's capital, La Paz.

The consultation may also define whether the future mine, which will become the largest in the country, will be operated by the State, by the Canadian company or by a joint venture, said Minister of Mines, Mario Virreira, as Portal Minero reports.

About 3,000 protestors are expected to arrive in La Paz on Monday, concluding a march started on Tuesday, over 400 kilometres south of the capital. The main objective of the demonstration, say community leaders, is to have Morales deny exploitation rights to the Vancouver-based mining company.

However, Virreira was quoted as saying "the real motivation" behind the demonstration is to perpetuate illegal gold mining practices.

"The region residents have said they want [South American Silver] to continue its exploration activities and the only want to be consulted before the company starts operations," he added.

South American Silver was granted explorations rights in 2006, three years before Morales passed a law that establishes prior consultation with indigenous peoples for any mining project.

Since late 2010, mining concessions in Bolivia have been declared "special temporary licenses" until the approval of a new regulation, currently in the works, that will require all the companies operating in Bolivia to sign a joint venture deal with the State's mining company Comibol.

Bolivia's Morales nationalizes zinc and tin mines licensed to Swiss group

Merco Press

11 June 2012

Bolivia announced on Sunday the nationalization of the mining company Colquiri to the west of the country and which belongs to the Swiss group Glencore. The announcement by Minister of the Presidency, Juan Ramon Quintana, followed a meeting with the mining unions and the villages from Colquiri region.

Minister of the Presidency, Juan Ramon Quintana, making the announcement Minister of the Presidency, Juan Ramon Quintana, making the announcement

"The government has decided to nationalize Colquiri which is a private company that belongs to Sinchi Wayra, a subsidiary from the mining group Glencore", said Quintana.

The administration of President Evo Morales had already seized two metal foundries from Glencore in 2007 and 2010.

The Swiss company operates through Sinchi Wayra which controls Colquiri for the exploitation of zinc and tin with 400 miners.

The Bolivian government said that nationalization will not include areas in the region licensed to Cooperative February 26, although if its members so wish, the government can take care in a concerted way the control of the operations.

The leaders from the National Federation of Miners' cooperatives, an influential group in the government of President Morales and with a strong capacity to take to the streets rejected the idea of nationalizing their sector and warned they will proceed to blockade roads in the country

Albino García one of the leaders of the cooperatives said that if the government moves into their sector they will respond with a national conflict.

Jindal warns it may scrap $2 bln Bolivia project


9 June 2012

REUTERS - Indias Jindal Steel & Power (JSPL) said on Saturday it was making plans to scrap a $2.1 billion steel project in Bolivia, saying the Bolivian government had not met contract terms that include supply of natural gas for the project. The steel and power producer said it had served its 'intent to terminate the contract' and the Bolivian government had 30 days to resolve the issues.

'In case government of Bolivia comes out clean and informs as to how much gas it can actually supply and agrees to reconfigure plant capacity and investment and amend the contract JSPL can consider staying back,' a Jindal Steel statement said. Jindal Steel had signed a pact with the Bolivian government in 2007 to invest $2.1 billion in iron ore mining and steelmaking.

The company said it was the single largest foreign investment in the country. According to the contract, Bolivia was to sign an agreement to supply 10 million cubic metres per day of natural gas, Jindal Steel said, adding the pact had not yet been signed.

Also, the Bolivian government has so far not provided all the land required for the project, the company statement said.

(Reporting by Sumeet Chatterjee; editing by Andrew Roche)

Govt asks Jindal for El Mutún spending audit - Bolivia

Business News Americas

12 June 2012

The Bolivian government has asked Indian-owned Jindal to demonstrate via audit documents that it has spent at least US$600mn so far at the El Mutún iron ore and steel project in Santa Cruz department, which the company signed an eight-year, US$2.1bn contract to develop in 2006, according to a source at state miner Comibol.

"At the state level the expectation is for Jindal to comply with the contract, because there has been incompliance on a number of aspects," the Comibol source told BNamericas, adding that Jindal must provide proof by Wednesday (June 13).

The comments come in response to a letter Jindal sent to the Bolivian government stating its intention to withdraw from the project blaming the government's for not living up to its side of the contract.

More specifically, the company says it is still waiting for the Bolivian government to sign a gas supply contract for El Mutún and for certain lands needed for project development to be transferred.

The El Mutún contract is between Jindal, Comibol and state steel company ESM.

On one hand, Jindal claims the gas supply and land issues have long been impeding the project's advancement, while on the other hand, the government has consistently accused the Indian company of not fulfilling the contract in terms of investment and demanded spending audits.

The question is whether either side will pull the plug or if in the case of Jindal's letter, it will boil down to pressure tactics.

"That is what I want to see before I give any opinion... the first impressions is never good," the recently ousted president of ESM, Sergio Alandia, said by telephone from Santa Cruz when asked about the letter.

The Comibol source added that once the relevant authorities evaluate Jindal's letter, the sides will most likely enter into negotiations.

El Mutún is located in a 65km2 area of Santa Cruz's Germán Busch province and has 40Bt in reserves grading 50% iron ore.

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