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Bolivia's Morales nationalizes smelter

Foundry workers clash with Bolivian troops trying to seize the Vinto industrial complex in Oruro, Bolivia, on Friday. The foundry was owned by Swiss mining group Glencore before it was nationalized on Friday by leftist Bolivian President Evo Morales. PHOTO: AFP

Bolivian President Evo Morales signed a decree nationalizing a tin smelter owned by the Swiss mining company Glencore International, a first step toward his declared ambitions to win his government a larger share of Bolivia's mineral wealth.

Morales did not immediately name the terms for the takeover of the Vinto plant, the country's only operating smelter.

He stressed that Bolivia must not only control its rich mineral resources but also the refinement of raw ore into valuable metals.

"Our natural resources have been looted again and again," Morales told the smelter's employees on Friday.

"We have never been permitted to industrialize our own natural resources," he said. "With so many false pretexts ... they tried to keep Bolivia merely an exporter of raw materials. But now the hour has come to industrialize all of our natural resources."

Officials at Glencore and its Bolivian subsidiary Sinchi Wayra could not immediately be reached for comment.

Morales has spoken broadly about nationalizing Bolivia's mining sector, but the industry's complex structure means that it is unlikely to see an across-the-board move similar to last year's oil and gas nationalization.

"We have never been permitted to industrialize our own natural resources. With so many false pretexts ... they tried to keep Bolivia merely an exporter of raw materials."

Evo Morales, Bolivian president

The Vinto smelter, located near Oruro on the high Andean plain 180km southeast of La Paz, was -- until Friday -- entirely in private hands, but all of Bolivia's extensive mineral deposits are already owned by the government.

State mining company Comibol works a handful of the deposits, but most are mined through private concessions split between independent Bolivian miners' cooperatives -- most still working with hammer and chisel -- and giant international companies, including Glencore and US-based companies Coeur d'Alene Mines and Apex Silver Mines.

Morales has said that only those concessions left idle or lacking investment will be returned to the state.

In the meantime, the president has proposed a tax hike aimed at recovering more of Bolivia's soaring mineral revenues, driven in part by demand from China.

When Vinto was built in the 1970s, Bolivia exported mostly raw mineral ore, allowing other countries to reap the refining profits.

The Bolivian government sold the Vinto smelter in 2001 to Allied Deals, which later sold it to Comsur, a private mining company whose largest stockholder at the time was former Bolivian president Gonzalo Sanchez de Lozada.

Lozada fled Bolivia in October 2003 during riots against his administration and is still being sought in connection with a crackdown on the protests that left more than 60 Bolivians dead.

Glencore bought the plant from Comsur in 2004, but the shadow of Sanchez de Lozada remains a powerful political symbol in Bolivia.

On Friday, Morales declared that all other mining interests once held by Sanchez de Lozada must be returned to the state.
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