Bolivia's plans to nationalize mines owned by Pan American
Silver Corp (PAAS) and Swiss commodities trader Glencore
International AG appear to have hit a snag, with workers' unions at
the two companies rejecting the move.
The government has said it would not move forward with taking
over the mines if the unions opposed it.
The idea has been discarded because the unions don't want any
change, vice minister of mining development Hector Cordova told
Radio Fides late Tuesday.
However, an official decision has not been made yet and mining
minister Jose Pimentel was meeting with president Evo Morales
Wednesday, mining ministry spokesman Alfredo Zaconeta said in a
telephone interview. An official announcement is expected later in
the day, he said.
Last week, Morales said something had to be done about miners'
demands that the state "reclaim" mines that were sold to private
investors in the 1990s.
Morales, has greatly expanded government control over the
economy since he took office in 2006. During that time, he has
nationalized or raised taxes on oil, natural gas, mining,
telecommunications, and power companies.
Glencore's Bolivian subsidiary Sinchi Wayra runs the Colquiri,
Porco and Bolivar zinc, lead and tin mines, which were privatized
in the 1990s. In February 2007, the Morales administration seized
Glencore's Vinto tin smelter following accusations of corruption
involving the sale of the plant to Glencore and claims that the
company failed to conduct the maintenance stipulated in its
contract.
The company and government have been locked in a bitter dispute
ever since, with each side claiming that compensation is owed by
the other.
Canada's Pan American Silver bought the rights to the San
Vicente project from state mining company Comibol at the end of the
1990s. In 2010, Pan American produced more than 3 million ounces of
silver at the San Vicente mine.
Pan American Silver is the world's second-largest primary silver
producer and has a number of mining operations across Latin
America. Its San Vicente mine produced about 12% of the 24.3
million ounces of silver it mined last year.
-By Shane Romig, Dow Jones Newswires; 54-11-4103-6738;
shane.romig@dowjones.com