Bolivia Government Revokes Glencore’s Lease for Tin Mine
Bolivia’s government took over Glencore International Plc (GLEN)’s Colquiri tin and zinc mine to boost its control over the mining industry.
State mining company Comibol will manage the mine, which was sold off by the government in 2002, Vice President Alvaro Garcia Linera said today after revoking Glencore’s license. Glencore acquired the mine from former president Gonzalo Sanchez de Lozada in 2005.
“This is our mining policy: the State, cooperatives, and national investment,” Garcia Linera said in a broadcast by state-run Radio Patria Nueva. “We’re not going to hand our country to foreigners who destroyed Bolivia and left it stagnating for 20 years.”
President Evo Morales, a 52-year-old ally of Venezuelan President Hugo Chavez, has raised taxes and seized mines, oil refineries and power companies since taking power in 2006. Earlier this year, Bolivia took over assets from Spain’s Red Electrica Corp. (REE) and Pan American Energy LLC.
The government will take 120 days to determine how much compensation will be paid to Glencore, state news agency ABI reported.
Morales nationalized Baar, Switzerland-based Glencore’s Vinto tin smelter in 2007. Simon Buerk, a spokesman for Glencore, didn’t immediately return telephone calls and e-mails seeking comment.
Bolivia, which saw mining export revenue jump 50 percent to $3.7 billion last year, is unlikely to feel an immediate impact from declining foreign investment as surging minerals prices enabled the government to balance its accounts, said Gabriel Torres, a Moody’s analyst.
“Bolivia has been very clear it wanted to take charge of key sectors driving its economy, but they’re limiting potential upside going forward,” Torres said in a telephone interview from New York. “You have to ask yourself whether they could grow faster if they didn’t nationalize.”
Moody’s rates Bolivia Ba3, three levels below investment grade.
Chavez nationalized Venezuela’s gold industry in September after canceling concessions for companies including Canada’s Crystallex International Corp. Another Chavez ally, Ecuador’s Rafael Correa, tightened state control over the country’s mining industry in 2009.
Bolivia’s zinc output fell 4.5 percent to 411,408 metric tons in 2010, according to the Mining Ministry. Lead output dropped 14 percent to 72,803 tons and silver declined 5 percent to 1.26 million kilograms, while tin climbed 3 percent to 20,190 tons.
Glencore rose 1 percent to 333.25 pence at the close in London.
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