SÃO PAULO Glencore Xstrata Plc has signed a contract with the Bolivian government to explore Bolívar and Porco mines in the countrys Oruro and Potosí regions, AMM sister publication Metal Bulletin understands.
"There is a new joint venture with the Bolivian government," a source close to Glencore Xstrata told Metal Bulletin.
The contract aims to guarantee zinc-lead-silver production in the Oruro and Potosí districts over the next 15 years.
The agreement comes a year after Bolivias then-acting president Álvaro García Linera nationalized the Colquiri zinc-tin project, operated by Glencore subsidiary Sinchi Wayra SA.
Under the new contract, Bolivian state mining company Corporación Minera de Bolivia (Comibol) will own 55 percent of the venture, while Glencore Xstrata subsidiaries will hold the remainder.
Baar, Switzerland-based Glencore Xstrata will initially invest $100 million in the Porco project and total investment could reach $700 million, according to Comibol.
Bolivias decision to nationalize Colquiri came after hundreds of independent miners took over the mine, injuring at least seven Sinchi Wayra workers.
At the time, Glencore "strongly protested" the nationalization of its Colquiri mine and said the decision raised questions about future policy toward foreign investment.
Meanwhile, Bolivian President Evo Morales on Sept. 19 enacted the Reversion Act for Mining Rights, which aims to nationalize about 1,700 private mining concessions that are considered "unproductive."
"The new law has no impact on the companys [Glencore Xstrata] business in Bolivia," the source close to the company added.
A version of this article was first published in AMM sister publication Metal Bulletin.