Glencore receives Colquiri nationalisation decree from Bolivian government

24 June 2012 (Last Updated June 24th, 2012 18:30)

Commodities trader Glencore International said that it has received a signed supreme decree from the Bolivian government, immediately nationalising the Colquiri zinc-tin mine in the Bolivian province of La Paz.

Commodities trader Glencore International said that it has received a signed supreme decree from the Bolivian government, immediately nationalising the Colquiri zinc-tin mine in the Bolivian province of La Paz.

The firm said it strongly opposes the actions and reserves its rights to seek fair compensation pursuant to all available domestic and international remedies.

Bolivian Government Minister Carlos Romero was quoted by Reuters as saying the decree would be signed to hand mine operations to state mining company Comibol and leave part of the site in the hands of independent mining cooperatives that already work there.

"This is a historic agreement because it's going to allow the nationalisation of Colquiri, respecting the work of employees as well as the cooperative miners," Romero said.

Glencore has paid Bolivia more than $70m in royalties, taxes and fees for operations at the Colquiri mine and has paid more than $300m for all its operations to the Government and to the Bolivian state mining company Comibol.

The company has invested a total of $80m, with $22m in Colquiri, across its operations in the South American country.

The nationalisation of the Colquiri mine was announced just as Glencore was renegotiating its mining contracts with the government.

Under the new agreement, Glencore would have committed to investing over $160m, of which at least $56m was allocated to the Colquiri mine over the next five years.

In a statement, the firm said, "The action taken by the Government of Bolivia will pose a number of serious questions relating to the Government's future policy towards foreign investment in the mining sector."