Swiss-based commodities giant Glencore International PLC protested on Friday against the Bolivian government's nationalization of the Colquiri tin and zinc mine.
"Glencore strongly protests the action taken by the government of Bolivia and reserves its rights to seek fair compensation pursuant to all available domestic and international remedies," it said in a statement, adding it would work to ensure an orderly handover of control.
Glencore responded after receiving a signed decree from the Bolivian government that the mine in La Paz province was to be nationalized with immediate effect.
Since 2005, the mine has been operated by a Glencorce subsidiary, Sinchi Wayra, in accordance with rights granted by the Bolivian government, Glencore said.
It said that Colquiri has paid royalties, taxes and fees to the Bolivian state of more than $70 million.
News Arrives During Renegotiation
The mining heavyweight, based in Baar, central Switzerland, said it learned of the proposed nationalization just as it was finalizing the renegotiation of its mining contracts with Bolivia, which would have led to at least another $56 million of investment for Colquiri over the next five years.
Glencore said under the deal it would have invested another $160 million into Bolivia, on top of the $250 million it has to date, and that Bolivian government would have gotten 55% of profits.
"The action taken by the government of Bolivia will pose a number of serious questions relating to the government's future policy towards foreign investment in the mining sector," said the company.
Glencore said its immediate focus "is to seek an orderly handover of control of Colquiri with the Bolivian authorities and to ensure the well-being of its staff."