Daily Archives: June 6, 2012

Mining 101: in Bolivia is a difficult business

Four articles related with mining in Bolivia, appeared in newspapers yesterday; they will help understand how this business currently operates in Bolivia.

From Pagina Siete:

In four years there were at least 114 [illegal] mining sites’ takeovers

At least 114 mineral deposits were bullied in the past four years by cooperatives and herders, according to data from the National Chamber of Mining and the Federation of Trade Unions of Worker Miners of Bolivia.

In this period, small mining suffered over 100 takeovers by herders who acted under the name of [mining] cooperatives, denounced the President of the National Chamber of Mining, Saturnino Ramos. [photo is from last year’s when community people were going to takeover Sayaquira]

Of these subdues, 45% were registered in the Department of La Paz and the rest, in Oruro, Potosí and Cochabamba.

The Executive Secretary of the Federation of Miners, Miguel Perez, added that, in addition, takeovers at more than 14 sites since 2009 have been reported. The sector entered on Monday a mobilized an indefinite strike after the mine Colquiri (province Inquisivi, in La Paz) was taken by cooperatives.

Chamber and the Federation demand the Government halt the interventions and enforcement [of the law: protection of private property and honor existing contracts].

The leader of the departmental Federation of mining cooperatives of La Paz, Manuel Cañajua, commented that the takeovers are in some cases, due to the lack of response from the Government to provide areas of exploitation. [understood, but why do they have to take some else’s property? isn’t that anarchy?!]

There will be today an expanded departmental [meeting] to evaluate the issue to make a formal position on the decision-making in Colquiri.

David Ramos, Secretary general of the miners Federation, regretted that despite the multi-ministerial resolution 036/2009, subscribed following the protest-walk of 2009 to avoid more atrocities in the mining centers, the situation has not changed.

It is believed that the Mallku Khota, Torña Khota and Colquiri takeovers illustrate how the Constitution, the criminal code and the Civil Code are violated.

The leadership of the miners also recalled cases of Caracoles, Laramcota, Sayaquira and the Himalayas mines, that after four years of having been taken, was expropriated. [this last portion may refer only to Himalayas]

“This situation is of concern to the small mining;” There is no one who can put an end to these abuses, lack of the principle of authority. “Before takeovers continue growing, the Government must put an order”, said the general Secretary of the Federation.

Ramos stressed that small mining ventures develop infrastructure, exploit the minerals in a rational manner and respect the environment law. [small mining? I have my doubts… as in Bolivia, any mitigation or environmental management is considered only a cost not an investment, and most of the payments under those categories end up in operating costs for the leadership organizational structures in the region]

In addition, said, they provide the State with taxes and the regions with royalties. “They risk their housing, their capital and invest time to work.”

In the case of Mallku Khota, he recalled, it is a Canadian company that explores the sites and which has invested $50 million.


From La Razon:

Jindal conditions stay in Bolivia

The President of Jindal Steel & Power Limited (JSPL), Naveen Jindal, determined its permanence in the country to the Bolivian Government, but especially to the President Evo Morales, who should support the Mutún iron and steel project.

According to the Indian businessman, in the past two years, the State iron and steel Mutún company (ESM) the only thing that did was put obstacles to the [Jindal] company. The PAT television network last night [6/4/12] showed the second part of the interview with Naveen Jindal. During the same, the Indian businessman complained of the lack of support of the Bolivian Government and stated that, in the present circumstances, he could not continue to invest in the country.

“We could have transformed Bolivia;” “but, instead of supporting us, only put us barriers,” said and also pointed out that if the Government had given them all the conditions to develop the project, Bolivia would have grown between 10 and 18% in the span of ten years.

Jindal indicated that not only they would have invested $2.1 billion dollars, committed in the contract of joint venture, but $3 billion to make the country one of the largest exporters of iron and steel in the world.

The employer also revealed that the firm has already invested $650 million dollars in the construction of plants, but they are too big for the volumes of gas that aims to deliver the Bolivian State. According to Jindal, investment in the Mutún was with own resources. “No financial institution wanted to lend money to Bolivia”.


Carla Paz Vargas writes for El Deber:

They uncover Jindal’s troubles for debts and rental

The company Jindal Steel Bolivia, promised investment for $ 2.1 billion dollars in the country, but when failing in the advancement of the project, lost $36 million on warranty ballots; now becomes involved in a legal mess by the alleged misappropriation of Tacuaral building, they now occupy, and stopped paying 42 months of rent.

Óscar Moreno, owner of Tacuaral building, said he had contract with Jindal, Arvind Sharma and GTLI, Luis Carlos Kinn, executives, for the sale of the building in about $3 million, and that gave $800,000 of guarantee. However, by breaking the agreement and when requested to return the offices dealing with (second and fourth floor), but refused. The Justice ruled that the money is as compensation for damages.

He [Moreno] stated that the representatives of Jindal and GTLI do not pay rent, common costs or expense for 42 months, generating a debt of $380,000 dollars to date.

In an effort to evict the occupants, Moreno takes 12 trials against Jindal executives from three years ago. Consulted on the reasons why he waited so long to denounce the situation, he stated that he received threats and Sharma threaten him indicating that he [Sharma] had good relations with government authorities.

About the ‘estelionato’ [crime of selling anything as his own], the owner of the Tacuaral building argued both Sharma and Kinn declared themselves owners of the property and have mutually rented offices. However, the Santa Cruz District Court confirmed that Moreno is the owner.

In turn, the lawyer of Moreno, Luis Fernando Calvo, pointed out that when the Supreme Court recognized that Sharma and Kinn are not owners, the Attorney charged them by ideological falsehood and ‘estelionato’. “It was then that Sharma reached the extreme of wanting to bribe the police investigator, but he was denounced by bribery,” he explained.

In addition, Calvo said that in the course of the last few months has seen how trails are dilated. In the process of eviction, which won in the first instance, they appealed and the judge quashed the judgement and asking that Vikrant Gujral is summoned in his home, i.e., in the India.

Thus, yesterday a hearing was scheduled that would define the future of Sharma and Kinn, but since there were several arrests over the weekend, it was postponed to Monday 11th in the fifth criminal court.

Sharma and Kinn were called, but not answered their mobile phones. Consulted Jorge Gallardo, legal advisor of the Jindal, did not want to give details and simply indicate that they would send a press release. “With regard to the statements by counsel stating that Jindal does not pay rents of their offices, we have to clarify that the item in question is a matter which lies in litigation before a judge, this instance being the sole authority to comment on the outcome of the case”, says the company [lawyer].

It’s crimes of fraud – José Ernesto Aponte | Attorney and legal analyst

The ‘estelionato’ is the crime of selling anything as his own, a litigious thing (which is in litigation) or something that is taxed (mortgaged), is a crime of fraud because it is a hoax that is made to the other party. It is sold, rented or occurs in ‘anticrético’ [give a large amount for a long period of time, upon end of contract, amount is returned; supposedly that large amount is invested by the owner] a property which is not itself and which is not authorized to do so. The penalty is one to five years in prison, because it is a fraudulent offence, which means that it is done with intention, with full knowledge of the fraud.

For Jindal, they should have not rented, they were not allowed, because they still were not the owners of the property. However, should analyse the contract to be able to say if they failed or not to be as objective as possible.

On the falsity, there are ideological and material, is when a document become something that is false. The ideological falsehood is to insert statements that are false, also in a public document are intentional offences made with malicious intent. A document is public when a private memorandum is legalized by a notary of public faith, when he transcribed it gives you a copy and is a public deed. The penalty is one to six years.

Active bribery refers to who you give or offered handouts to a civil servant or a person responsible for a public service in general, so he does or omits an act in relation to its functions and duties. If found guilty, the accused is punished with deprivation of liberty from three to eight years.

ESM demand more seriousness to the company

The Member of the Board of the Mutún iron and steel company (ESM), Emilio Rodas, requested seriousness to the company (Jindal Steel Bolivia (JSB) in the contractual relationship on the exploitation of the Mutún iron mega deposit, located to the South-West of the country.

“The Jindal has to take a position, we will or we are not going along with the project, can not deceive people;” “people expect much of this contractual relationship”, stated to the media.

Rhodes considered that the Jindal still does not give concrete signs of wanting to continue in the country despite the facilities given the Bolivian State and the ESM to the Indian company so they can exploit and industrialize iron at the site of Mutún/ABI

In detail

– Conflict. Jindal signed a contract to buy the Tacuaral building for about $3 million dollars, but only paid $800,000. The Santa Cruz Superior District Court determined that money delivered as deposit, may stay in power of the owner Oscar Moreno, for damages.

– Rentals. The India Consulate and the doctor’s office of Jindal owe 42 months, at least $50,000 dollars each. The GTLI (partner of Jindal) firm owed more than $140,000 and Jindal other $140,000; in total there is  $380,000, according to the owner of the property.

– Processes. The owner of the building Tacuaral in Equipetrol Norte, takes 12 trials against Jindal and his partner Luis Carlos Kinn, GTLI Manager for the criminal offences of ‘estelionato’, ideological falsehood, dispossession, eviction and others.


From El Diario:

Gold reserves lose value in $304 million dollars

Per ounce price fell below $1,600 in May, that purpose caused a fall of the reserves. The price of the troy ounce of gold went from $1,711 to $1,573 dollars; that is the decrease of $138, according to information of the Central Bank of Bolivia and specialized in minerals kitco.com quotation report.


So, I have to say, regretfully, that all those centuries of ‘mining experience’ in Bolivia gave us practically nothing good to capitalize from. We continue to fail to comply with the Law; we do not honor contracts; bad politics and lack of ensuring bidding and award of contracts is not done in a professional, efficient manner; lack to enforce implementation; fail to monitor effectively agreements and investment intentions; and fail to have an adequate infrastructure to be competitive.