Andean Group - July 2012 (ISSN 1741-4466)

Another nationalisation: Less than a month after Morales nationalised Colquiri, a small tin/silver mine controlled by Sinchi Wayra, a subsidiary of Switzerland’s Glencore [RA-12-06], on 10 July he announced that he would decree the nationalisation of the Mallku Khota mine, owned by Compañía Minera Mallku Khota (CMMK), a subsidiary of the Canadian company South American Silver (SASC). With indicated resources of 230.3m ounces of silver and 1,481 tonnes of indium, plus inferred resources of 140m ounces of silver and 935 tonnes of indium, Mallku Khota has the potential to be Bolivia’s biggest mine. Along with the Colquiri mine, it had been at the centre of recent social unrest. Over the past month, seven people, including mine employees, were taken hostage by mining opponents and one person died in as yet unclarified circumstances. Four of the hostages were rescued on 6 July, with the other three being released by their captors two days later. The latter group included engineers employed by SASC and accused by the local community protestors of spying on them. While the nationalisation of Colquiri was accepted by Glencore – although this could change depending on the terms of the compensation, which the government is still in the process of determining, the announcement regarding the Mallku Khota mine met with an outspoken response from the Canadian company. On 10 July, SASC issued a statement expressing “extreme disappointment”, adding that “South American Silver has not received any formal notice from the Bolivian Government about the cancellation of its concession and is actively seeking clarification about the government's intentions”. Greg Johnson, the president and CEO of South American Silver, was clear that "we strongly object to the government's stated course of actions [sic] and we will pursue all legal, constitutional and diplomatic options”.

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