Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Bolivia’s leftist government announced it won’t pay any financial compensation to Swiss miner Glencore (LON:GLEN) after yesterday’s decision to take over its Colquiri tin and zinc mine. The purpose for the move is to create greater control over the local mining industry.
According to Terra.com, President Evo Morales resolved to nationalize the Colquiri mine to end a long dispute between the global commodities giant and its workers. The decree said the government will only pay Glencore’s local subsidiary, Sinchi Wayra, a nominal amount for the machinery and belongings stored there, but nor for any debts the company has.
With the presidential ruling, the control of the deposit goes back to the State mining company Comibol which sold off Colquiri in 2002, which was then acquired by Glencore in 2005 from former president Gonzalo Sánchez de Lozada.
Morales has raised taxes and nationalized the key natural gas industry as well as the telecommunications and electricity sectors, since taking power in 2006. Earlier this year, Bolivia took over assets from Spain’s Red Eléctrica Corp. (REE) and Pan American Energy LLC.
Last week, hundreds of police and soldiers were sent to Colquiri following violent fights between rival miners. It is believed that the battle began when Glencore workers tried to forcefully take back control of the mine from a rival state-based company.
There is history behind the fighting seen at the Colquiri mine. Six years ago similar circumstances saw violence break out over access to the state-controlled Huanuni mine. The clash ended in the death of 17 people.
Bolivia is a current hot spot for investors as President Morales has been in consultation with local leaders to allow the extraction of resources originally thought to be untouchable.
Read more on Bolivia’s decision to allow foreign companies access >>.
5 Comments
Pinche Inversionista
Typical commie BS!!!! Then they complain when there aren’t any jobs or investors!!!
Ch
Evo Morales loves to get advise from Fidel Castro. They will nationalize all their natural resources so a few of his supporter can reap all the wealth. I wonder how many billions he is worth already?
Gabriel Rojas
Glencore doesn´t own the mine, it is a concession given by the Government. The corrupt government of Sanchez de Lozada privatized the mine first, that then bought himself. He later sold the assets of the mine to Glencore. To me, a simple restoration of the property to its rightful owner, the people of Bolivia.
Big joe
Your talking non-sense, first you say they don’t own the mine, then you say the assets were sold to Glencore. What is it? If Glencore paid a price for assets then the people of Bolivia or country owes them that money back in return. Sounds like Bolivia is a un-trusting communist country.
Gabriel Rojas
Do not confuse assets with the resources under concession. In addition, the Government has announced it will pay for the assets of the company.
And perhaps Bolivia is unreliable to invest, but you can not ignore the fact that they have been plundered throughout history.