Mining Companies Fret Over Bolivia Plan
Thursday, May 11, 2006; 5:39 PM
TORONTO -- In a May 9 story about North American mining companies' concerns about investments in Bolivia, The Associated Press reported erroneously that Coeur d'Alene Mines Corp. had invested $135 million in a Bolivian mining project. Scott Lamb, a spokesman for the Idaho company, said that amount was budgeted for the project, but only $35 million was spent so far.
TORONTO (AP) _ Bolivia's plan to nationalize its natural gas industry and exert greater state control over all of its natural resources has North American mining companies fretting over their future prospects extracting the nation's rich resources of gold, silver and tin.
The chairman of one of the world's largest gold producers told his shareholders he would now "put my buck" on exploration in Pakistan, rather than the South American countries throwing up more roadblocks to foreign investors.
Patricia Dillon, president of the Prospectors and Developers Association of Canada, said plans by Bolivia to raise taxes and royalties on foreign mining firms are disconcerting.
"We respect the right of foreign governments to act as they see fit and in their people's best interests. However, we believe that countries should be wary of adopting policies that, over the long term, will act as deterrents to foreign investment."
Bolivia's government said last week that it would extend control over mining, forestry and other sectors of the economy, after President Evo Morales nationalized the country's natural gas industry on May 1.
The moves solidify Morales' role alongside Venezuela's Hugo Chavez and Cuba's Fidel Castro as Latin America's new socialist-inclined leaders united against what they view as the capitalist influence of U.S. and other foreign investors.
Morales said his countrymen are weary of foreign exploitation of their natural resources and he intends to put more revenue from those assets back into the poorest country in South America.
"We're not expelling any company, but they will not earn much _ not like before," Morales told Venezuela's Telesur last week. "We hope they'll remain partners and if they don't respect these laws, we'll make them respect them with political force."
Vice President Alvaro Garcia Linera has emphasized that mining would not be nationalized. But he said foreign companies would face higher taxes and royalty payments and that the government would intensify enforcement of existing laws to break up big underdeveloped land holdings, apparently to turn them over to the poor.
This uncertainty prompted the founder of one of the world's largest gold producers to say he now sees Pakistan as a better place invest in, despite the presence of Islamic militants in the South Asian nation.
"Pakistan ... from a mining point of view, from a business point of view, is among the better countries," Peter Munk, chairman of Toronto-based Barrick Gold Corp., told shareholders at the Canadian company's annual meeting last week. "If I had the choice to put my money in one of the Latin American countries run by Evo Morales or Chavez _ I know where I'd put my buck."