Bolivia to revoke license from Canadian miner

Tue Jul 10, 2012 7:59pm EDT
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LA PAZ (Reuters) - Bolivia's leftist president said on Tuesday he would revoke a mining concession from Canada's South American Silver Corp and give the state control of the site due to violent protests over the company's plans.

It is the second time in less than a month that President Evo Morales has given in to protesters' demands for him to step up a drive to increase state control over natural resources in the poor Andean country.

Violence flared last week at South American Silver's Malku Khota project after protesters held five Bolivian employees hostage to demand the Canadian company leave.

They hailed the president's decision as a definitive solution to the conflict in which one protester was killed and a dozen more injured.

"The company (South American Silver) put brothers, brothers-in-law, cousins and neighbors at odds with one another," Morales said at the presidential palace as he explained the deal between protesters and his government.

"How can we be at odds with each other over an international company that comes to loot our natural resources?" said Morales, an ally of Venezuela's Hugo Chavez, who has increased state control over the economy with a series of nationalizations.

Under a deal signed with the protesters, the government will set up a joint commission to draw up a decree to revert all the concessions granted to South American Silver Corp's local subsidiary. Some peasant farmers in favor of the project also backed the accord.

The Canadian company describes the exploration project as "one of the world's largest undeveloped silver, indium and gallium deposits." A company spokesman declined to comment.

The workers who were held hostage were freed at the weekend after the government promised to study a possible nationalization of the project.   Continued...

Bolivia's President Evo Morales speaks during a news conference at the presidential palace in La Paz, July 2, 2012. REUTERS/David Mercado