Showing posts with label Foreign Companies. Show all posts
Showing posts with label Foreign Companies. Show all posts

May 02, 2008

The Government's Response?

MABB © ®

Today, as I was taking a walk through La Paz's center, I got dropped off by my taxi in front of the telecommunications company, Entel. As there seemed to be some commotion around the building, lots of people, police and others who seemed foreign nationals, I turned my attention towards it. It seemed to me they were going in to do something. At this point I had no idea what was going on. I continued my walk towards the gathering in plaza Murillo, where the government was going to celebrate the 1st May holiday. I took a look at the people gathered, noticing there weren't as many as I thought, and turned around and went back. Now, I am sorry I didn't stick around for Morales' speech.

President Morales surprised many when he announced the proclamation of 8 Decretos Supremos (supreme decrees) and one bill to regulate labor law. Among the most important DSs were the ones completing the "nationalization" process of the three major energy companies dealing with natural gas, Transredes (controlled by Ashmore and Shell), Andina (controlled by Repsol) and Chaco (controlled by Pan American Energy). Another DS ordered the taking over of DLHB (controlled by Peruvian and German investors).

The most surprising announcement was the "nationalization" of the telecommunications company Entel, which is the movement I saw. As Morales signed the DS, the company was being taken over by officials.

However, the announcement regarding the energy companies was not a total surprise. The press had already reported the government's intentions (here and here).

While the government continues its campaign "giving" gifts to the population on May 1st, the referendum in Santa Cruz continues its course.

February 10, 2008

Floods, Investment and Spying in Bolivia

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At present time, with the celebrations of carnival, there is not much going on politically in Bolivia. The news are coming from the weather side. The department of Beni, which is practically in the Amazone region, has been suffering flooding through the endless rains. The departments is significantly flooded by the waters of two rivers. Some images can be seen at the BBC News website.

Bolivian newspapers report that this is one of the worst floods in Beni's history and that the waters will keep on rising another 50 cm.

On another news, the Washington Post has an article on foreign investment in the energy sector. It pretty much echoes what I have been saying or noticing on this issues. The question was, if the natural gas sector has been nationalized, why are the foreign companies still staying and even pledging more investment?

Here is the article, see what you think about it.

Last but not least, there is this young scholar saying he has been asked by officials of the American Embassy in Bolivia to keep tap on Venezuelan and Cuban volunteers and report the names and what they are doing to the embassy. He, the scholar, has said it to the AP. He sounds outraged that his government would ask him to do such a thing.

First of all, what a moron... No, not the young scholar, but the embassy official. What a careless request, at such a fragile time between the relations of the US and Bolivia. What kind of people are working there, I ask myself.

And second, good for the young scholar. He's got principles. I guess he showed them.

I looked for a reaction on the US Embassy in Bolivia, but I couldn't find one. And, apparently there was not too much interest from the Bolivian press either.

Waiting for reactions!

August 01, 2007

Optimism Reigns in the Bolivian Mining Idustry

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After all the talk about the nationalization of the mining industry in Bolivia, to my surprise, most of the companies doing business there choose to have optimism. We just saw the signing of the contract between the Indian Jindal company and the Bolivian government. This is supposed to be one of the biggest and most important deals the government has made to date. As for the already operating companies, they also have a positive attitude.

Eaglecresst Explorations, for example, describes in its website that the situation in Bolivia "continues to be challenging, particularly regarding the latest headlines regarding the “nationalization” of mineral assets. But according to the Bolivian government, they will not expropriate mines that are being actively worked and that are following all laws and tax rules. Eaglecrest was inspected this Fall and found to be “in complete compliance with all Bolivian laws and regulations, including mining and environmental regulations and tax laws.”
The Minister of Mining has said that there will be an increase in the royalty tax on the production of metals (currently 4%). But Eaglecrest does not anticipate the government’s new proposed laws will jeopardized the exploration or development of San Simon. Our good neighbors seem to agree. Several international mining companies have announced investments of US$35M to US$700M along with their plans to move forward with projects in Bolivia. The largest foreign investment is coming from the joint Apex/Sumitomo development of the world-class San Cristobal silver-lead-zinc deposit."

It is striking with what optimism these companies are continuing to operate in Bolivia. I guess they don't have choice. Once they are committed, they have to look forward and hope for the best. Or are they so sure the government will not expropriate anything?