Bolivia Orders Ebx Out Of The Country

Bolivia Orders EBX Out of the Country

Associated Press News, LA PAZ, Bolivia (AP)

20th April 2006

Bolivia on Thursday ordered a Brazilian company out of the country after it allegedly built a wood-burning pig-iron plant without proper permits and backed protests aimed at forcing the government to allow the company to stay.

The move came after military and police forces on Wednesday freed Bolivia's minister of planning, economic development and mining who had been held hostage overnight in the town of Puerto Suarez by protesters supporting the company, EBX Siderurgica Boliviana, a unit of Rio de Janeiro-based Grupo EBX SA.

EBX began construction last year of the US$150 million (euro121.5 million) pig-iron plant without construction or environmental permits and is violating a law barring foreign companies operating within 50 kilometers (31 miles) of Bolivia's borders, Vice President Alvaro Garcia said.

"The decision is firm -- a company that doesn't respect the law has to go," Linera told reporters. "EBX has not and on top of this they are promoting conflicts between Bolivians."

EBX said in a statement, however, that its presence in Bolivia is legal and it hopes to discuss the issues with the government. The company also condemned violent protests and the hostage taking.

The company employs 1,500 people in Puerto Suarez, near the Brazilian border 1,150 kilometers (714 miles) east of the capital of La Paz.

The government has ordered the district attorney to investigate claims that the company has helped organize the protests in Puerto Suarez as well as the hostage-taking of the three government ministers.

The administration of President Evo Morales, who before being elected in December led disruptive protests by coca farmers, refused to negotiate with the protesters.

EBX set up its first wood-burning ovens last year to produce pig iron using iron ore from EBX's Ucurum mine located just across the border in Brazil. Pig iron is used in making steel.

Bolivia's National Environmental Office denied permission to EBX at the time saying that the operation result in thousands of hectares (acres) of forest being cut down in order to feed the plant with wood. EBX said its plant would not harm Bolivia's forests.

The government is demanding EBX use Bolivia's plentiful natural gas to power the plant, while EBX said in its statement that its not technically feasible to operate on gas alone.

The protests are raising already strained tensions between the Morales administration and leaders from the eastern Santa Cruz province, which includes Puerto Suarez.

Leaders from Santa Cruz, which is Bolivia's wealthiest region and where Morales' support is weakest, claim they are being overlooked by the central government and are threatening to hold a general strike later this month unless the government provides them with more teachers and health workers.

Santa Cruz's governor Ruben Costas, a Morales critic, has not openly denounced or supported the Puerto Suarez protesters who have held strikes and blocked roads and rail lines to Brazil for the past two days.

The leftist Morales was swept to power promising to stop the "pillaging" of Bolivia's natural resources by foreign interests and has pledged to increase state control over the exploitation of the country's natural resources.