April 14, 2011 / 4:59 PM / in 6 years

UPDATE 4-Bolivia may scrap Glencore, Pan American contracts

* Govt says would be “recovery”, not nationalization

* Recision could be decided later this month

* Unions proposed returning mines to state control (Updates with details on time frame, output figures, context)

By Claudia Soruco and Carlos Quiroga

LA PAZ, April 14 (Reuters) - Bolivia’s leftist government may rescind concessions on four mines run by Glencore [GLEN.UL] affiliates and Canada’s Pan American Silver PAA.TO(PAAS.O), the Andean country’s mining minister said on Thursday.

Mining unions are asking the state to “recover” the silver, zinc, lead and tin mines currently operated by private firms, which would be in line with President Evo Morales’ drive to regain control over key natural resources since 2006.

Mining Minister Jose Pimentel said state-run Bolivia Mining Corp (COMIBOL) would assume control of the mines if the concessions were rescinded, a move described as “recovery, not nationalization” that could happen before May 1.

The decision would affect Swiss commodity trader Glencore’s Porco, Colquiri and Bolivar mines, as well as Pan American’s San Vicente mine.

Pimentel said the government did not plan to target mining projects that have been private investments from the start, such as San Cristobal, the country’s largest silver mine, owned by Japan’s Sumitomo Corp (8053.T).

“We respect the legal framework but we are also conscious that the whole privatization process has had judicial pitfalls,” Pimentel said.

Coeur d‘Alene (CDE.N), which operates the San Bartolome silver mine in Bolivia, said it believes its operations in the country will not be impacted. [ID:nN14281107]

SAN VINCENTE

Pan American’s San Vicente mine, located in the center of the silver-rich Potosi region, produced 3.0 million ounces of silver and 4,661 tonnes of zinc concentrates last year, according to the company’s website.

Shares in Pan American fell as much as 11.3 percent, before recovering somewhat to close down 9.3 percent at C$35.89 on the Toronto Stock Exchange.

Pan American Silver’s corporate manager in Bolivia, Carlos Prieto, said he was troubled by the government’s announcement, although he said he did not have first-hand knowledge of the plan.

“We are concerned for the (legal) security of our investments,” Prieto told Reuters.

A spokeswoman for the company in Canada said Pan American was surprised by the minister’s reported statements, adding that the company has received no official word from authorities about the proposed move to rescind concessions.

“We are finding out everything from the press,” she said. “We are following the situation closely ... And we will keep the market updated if anything material comes up.”

GLENCORE

Glencore has operated in Bolivia since early 2005. The government nationalized its Vinto tin smelter two years later.

Through its Sinchi Wayra subsidiary, Glencore has said it can produce up to 205,000 tonnes of zinc concentrates, 15,000 tonnes of lead concentrates and 6,000 tonnes of tin concentrates a year at its five Bolivian mines -- Porco, Colquiri and Bolivar as well as two smaller sites.

The company did not give its capacity for silver output.

Officials at Sinchi Wayra, Glencore’s Bolivian subsidiary, declined to comment.

Zinc and silver exports brought $1.57 billion into the poor South American nation last year.

Factbox on Bolivia’s top mines [ID:nN30167493]

$1=$0.96 Canadian Additional reporting by Steve James in New York and Euan Rocha in Toronto; Writing by Hilary Burke; Editing by Alden Bentley and Rob Wilson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below