Bolivia to Nationalize Mining Industry

The Associated Press
Wednesday, January 10, 2007; 6:10 PM

MANAGUA, Nicaragua -- Bolivian President Evo Morales on Wednesday renewed his pledge to nationalize his country's mining industry, saying he would complete the task this year.

In comments after his arrival for Daniel Ortega's inauguration as Nicaragua's president, Morales said the mining industry was the next privatization he wanted to reverse.

"Last year we nationalized hydrocarbons," he said. "This year it will be mining."

Elected a year ago as Bolivia's first Indian president, Morales nationalized his country's extensive natural gas reserves on May 1, assuming a greater share of their revenues and control over their Bolivian operations.

Bolivian mines are already owned by the state but the government has granted mining concessions to private Bolivian cooperatives and foreign mining companies.

Morales has used the term "nationalization" to refer to his goal of garnering greater share of mineral export revenues for the government. He has not given details on how any new government action would affect mining concessions, but last week Bolivian Mining Minister Guillermo Dalence proposed a sharp hike in taxes on mining revenues.

Under pressure from the World Bank and International Monetary Fund, former President Gonzalo Sanchez de Lozada privatized a wide swath of Bolivian industry in the mid-1990s, including the oil and gas, water, power, railroad and telecommunications sectors, as well as the national airline and pension plan.

The privatization has had mixed results and failed to create new jobs as Sanchez de Lozada had hoped and Morales has vowed to reverse many on the privatizations.

This month, Morales announced the completed nationalization of the water company Aguas de Illimani, which serves Bolivia's capital of La Paz, after two years of negotiations with the utility owned by French transnational Suez.

A worldwide collapse of tin prices in the mid-1980's prompted the state mining company Comibol to lay off tens of thousands of miners and shut operations at many of its mines. As the market recovered during the 1990s, the Bolivian government granted concessions at idle state mines.

Morales announced his plans to "nationalize" the mines last year but in November appeared to back off the move, saying his government could not afford it.

Bolivia shipped some $485 million of mostly zinc, silver, gold, and tin during the first half of 2006 _ on pace to easily top 2005's total mineral exports of $536 million.

Mining is the country's second-largest source of export income for South America's poorest country, after natural gas.


Associated Press writer Dan Keane contributed to this report from La Paz, Bolivia.

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