LONDON (Reuters) - Angered by the nationalization of a tin and zinc mine in Bolivia, global commodities firm Glencore (GLEN.L) said on Friday it may seek compensation domestically or abroad.
Bolivia’s leftist government, headed by Evo Morales, took over operations at the Colquiri mine on Wednesday after weeks of violent protests.
Morales, who has already nationalized the Andean country’s natural gas and electricity industries, said the decree brought the local operating company Sinchi Wayra - which has been owned by Glencore since 2005 - back into state hands, resolving the dispute between employees and independent miners that has left 18 injured.
Glencore said on Friday that it would seek an orderly handover of control of the mine but condemned the government’s action.
“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,” the company said in a statement.
Liberum Capital analyst Dominic O‘Kane said the mine was “tiny” in the context of Glencore’s international operations.
“It’s a tiny, tiny mine. It’s not particularly significant. It’s a small negative,” he said.
However, Glencore queried the effect the move would have on foreign investment in Bolivia, where Morales is seeking to capitalize on high metals prices with sweeping mining reforms.
“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,” Glencore said.
It said it had paid over $300 million in fees to Bolivia, including over $70 million for Colquiri, and would have invested over $160 million over the next five years in the country.
Glencore shares were down 2.4 percent to 315 pence at 0754 EDT, compared to a European mining index .SXPP down 1.7 percent.
Reporting by Rosalba O'Brien and Sarah Young; Editing by Alison Williams