Bolivia ousts Canadian company from mountain “made of silver”
Shares for Canada’s South American Silver corp, dropped a stunning 17 percent.
“Nationalization is our obligation” said Bolivia’s President Evo Morales after a series of agitated events in the mineral-rich region of Potosí terminated in the appropriation of a silver mine owned by a subsidiary of Canadian South American Silver.
The property, part of a mountain said to be “made of silver” and expected to provide 13.6 million ounces of silver a year, spurred a dispute among indigenous groups that left dozens injured and one fatal casualty. Pressure on the Bolivian government built up after five mine workers were kidnapped and violence escalated in the region with indigenous groups demanding the ousting of foreign investors.
A Canadian report explains President Evo Morales signed an agreement Tuesday with indigenous leaders suspending exploration and activities in the property, guaranteeing peaceful co-existence, social peace, and free movement within the region.
Just three weeks ago, another foreign-owned mine had the same fate. President Morales has accused foreign companies of disrupting family unity in his country.
On the other side of the world, Canada’s South American Silver (SAS) has not received any formal notification by the Bolivian government about the loss of ownership of their property, Reuters reports. The company’s stock fell by 17.4% and tumbled throughout the consecutive days as investors speculated on official reactions.
“We strongly object to the government’s stated course of actions and we will pursue all legal, constitutional and diplomatic options,” said Chief Executive Greg Johnson in a statement to Reuters.
In the nineties Bolivia dissolved state-owned mining enterprises. But today the government’s portfolio includes shares in energy, transportation, and mining companies, all prominent sources of national revenue. Spain, Switzerland, and most recently Canada are among the countries who have seen their participation in the country’s mining sector cut abruptly.
Although controversial, some Bolivians still support the government’s actions. Capturing the gist of the problem, manifestation leader Benedicto Aguilar stated first in Spanish and then in Quechua that “the company had divided the community, but now we are unified by our own natural resources. The state should be in charge [of mining] not a multinational.”
(Photo: cesar angel.zaragoza)