Part II: An Emerging Mining Policy for Bolivia
On May 1, 2007, one year after the “nationalization” of the hydrocarbons industry, Bolivian President Evo Morales declared all Bolivian territory a public mining reserve and reasserted state jurisdiction and control over all minerals, metals, precious and semi-precious stones. The state mining company, Bolivian Mining Corporation (COMIBOL) now administers all mineral wealth except concessions granted before the decree. The decree also requires that the National Geological and Technical Mining Service complete a study previously unexplored and prospected areas to give the government and COMIBOL a more precise assessment of the vast mineral wealth within the nation’s borders. The decree prohibits granting further concessions, and freezes those currently under negotiation until a study can be completed.
Future mining concessions eliminated; pre-existing concessions remain intact
While stopping short of fully nationalizing the industry, the decree clearly asserts state control over all mineral wealth in the national territory and continues the process of “recovering control” of Bolivia’s natural resources, a key element of the President’s 2005 electoral platform. However the original interpretation of the decree has shifted. Mining Minister, Luis Alberto Echazú, stated foreign and domestic private mining companies will be required to enter into joint ventures with COMIBOL, the state mining company, and that concessions will no longer be granted to private companies. “Future concessions have been modified; they are going to have to sign a contract with COMIBOL. We’re not going to grant private concessions.”
The May 1 decree should not modify previous concessions and other private investments, They will not have to renegotiate contracts, nor enter into a joint venture with COMIBOL. Echazú affirmed, “Those who are already working in [Bolivia] will continue working under the same conditions.” Therefore, the operations of U.S. based Apex Silver Mines and Couer d’Alene Mines, that plan to initiate production in the coming year, should not be affected by the May 1 decree.
However, what remains unclear is whether the ongoing petitions for concessions will be affected by the decree. At one point Minister Echazú held out the possibility that these concessions would only be delayed until the completion of the study. With regard to future private investment in the mining sector Morales reiterated his mantra “Bolivia wants partners, not masters.” According to Morales, these contracts “will allow investors to recover their investments, but they will also to have to make an economic contribution to the state.”
The Four Pillars: An Emerging Mining Policy for Bolivia