No nationalization is in sight in the mines

You spend billions of dollars and you find your nationalized investment, rebelled Pierre Lassonde, President of Newmont Mining, number two World Gold, reacting to the decision of the Bolivian President Evo Morales to the expropriation of the sector of energy. This is the worst nightmare for all investor foreign.

The pattern of Newmont fears that Bolivian society Empresa Minera Inti Raymi, control 88 owner of the new project of Kori Chaca (224.000 ounces extracted per year), may be the target of a measure of this nature.

The consequences could be much more important in Apex Silver and Coeur d'Alene, two groups highly committed Americans in Bolivia (2.3 of the world production of silver, 0.2 of that of gold, 1.5 of the zinc in 2004). The first, established in 1993 and scored since 1997, has the San Cristobal project, in the southwest of the country. This site open is regarded as one of the richest in the world in silver, containing of proven and probable reserves to about 470 million ounces and up 22.3 million per year.

Soothing news releases

This mine, the first production is expected in the third quarter of 2007, is also capable of producing zinc (8 billion pounds) and lead (3 billion pounds).

The nationalization of the Bolivian energy has penalized the Apex Silver action, which gave more than 30 in eight sessions. The direction of the firm based in Denver, Colorado issued a soothing release in which she did not fear a plan of the Government of Bolivia in mines similar to that implemented in hydrocarbons. "Apex Silver was particularly relieved by recent statements of the Bolivian Minister of Mines and metallurgy affirming that policy towards the mining sector does not contemplate the nationalization of the sites, much less the incorporation in public sector companies private such as that which operates in San Cristobal", can be read.

But the market is not to reason and continues to sanction the title. As the largest producer of money of the United States, Coeur d'Alene, the second mining company very established in Bolivia, its title has melted by about 15 in two weeks on Wall Street. Its most promising assets is located at San Bartolomé the most ambitious mining project in the money in America for decades.

"More taxes."

The operation, expected to be completed sometime in 2007, is 150 million ounces in proved reserves and probable. The operation is expected to produce approximately 8 million ounces a year. Here, too, the direction the Group sought to calm investors by noting that the ownership of the rights of exploitation of San Bartolomé was already in the hands of La Paz via the State-owned company Corporación Minera de Bolivia (Comibol), Coeur d'Alene is that operator. Placed in a situation comparable to that of Coeur d'Alene with its Bolivian project in development to San Vicente, in the Andes, the Canadian firm Pan American Silver saw his title fall by 15 in fifteen days. This Silver and zinc mine is owned to 55 by the North American company, the remaining 45 returning to Comibol. In total, for the time being, the negative market reaction seems somewhat disproportionate. No nationalization is in sight in the mines.

However, as indicated by the Bolivian Vice-President Alvaro Garcia, "the major mining groups should pay more taxes."