LA PAZ, Bolivia - A day after Bolivia's president said the nationalization of the energy sector was "just the start," the country's vice president said on Tuesday the state wanted more control of the mining industry.
Vice president Alvaro Garcia said big mining companies must pay higher taxes and said the government would have a larger role in the industry, but he seemed to rule out a nationalization similar to that in the energy sphere.
Garcia said there would not be company expropriations and toned down Monday's remarks by President Evo Morales that sent shares in U.S. Apex Silver Mines Ltd. tumbling 26 percent early on Tuesday. They later made a strong recovery.
"The big mining companies have to pay more taxes ... the current rate is too low," Garcia told local radio. "There aren't going to be company expropriations ... but we are going to assume a greater level of state control."
Several large foreign mining firms are active in Bolivia, which exported minerals worth nearly $500 million in 2005 and is best known for tin and silver.
Apex Silver is developing the vast San Cristobal silver and zinc mine set to start production in southern Bolivia in 2007.
Shares in the company fell amid concern Bolivia would extend its nationalization from oil and gas to resources such as zinc and silver, analysts said. But the shares recovered most of their losses later in the day after Garcia's comments.
"We've been assured by various members of the Bolivian government that the investment being made in San Cristobal will be honored and that has reassured us," Apex Silver Chief Operating Officer Alan Edwards, told Reuters by telephone.
"Comments about nationalization obviously have a negative effect," he added, saying the company continued to talk with the government.
Geologically Rich
Bolivia is South America's poorest country but its impoverished indigenous majority has never seen the benefit of the country's geological riches since the colonial-era exploitation of famous silver mines in Potosi.
Morales, announcing his energy nationalization decree to jubilant crowds on Monday, said: "This is just the start ... tomorrow or the day after it will be mining, then the forestry sector, and eventually all the natural resources for which our ancestors fought."
The mining industry has been watching hard for signs of how the Morales government will carry out its pledges to increase state control of natural resources.
The association that represents medium-sized and larger miners in Bolivia has protested over previous government announcements advocating tax increases but it declined to comment on Morales's remarks.
Other foreign mining companies involved in Bolivia include U.S. gold miner Newmont Mining Corp. and Idaho-based Coeur d'Alene Mines Corp., which is developing the San Bartolome silver mine.
Coeur d'Alene said on Tuesday it expected to resume full-scale construction at the mine on July 1, saying it had been proceeding with the project "at a measured pace" in order to get further clarity about Bolivia's political situation.
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