Saturday, February 10, 2007

Bolivia: Tin Soldiers

The BBC reports that the controversial Vinto tin smelting plant (owned by Swiss company Glencore International AG) has been seized by troops and nationalised on the orders of President Evo Morales who said there were no immediate plans to pay compensation to the site's owners.

Goni... murderer, thief and tossbagThe decree enabling the seizure states "The Vinto Metallurgical Complex returns to the control of the Bolivian state with all its current shares, allowing the [state] Vinto Metallurgical Company to assume immediate administrative, technical, legal and financial control,"

This comes literally a few days after workers from private mines staged militant demonstrations in La Paz against increased taxation. A plan Morales is pressing ahead with, although he agreed concessions on Wednesday.

The Vinto smelter is an important point in the Bolivian export of tin because it is the only functioning smelter in the country which had somehow found itself moving from state control and mysteriously appearing in the assets of the serving President of the time, Gonzalo Sánchez de Lozada (or Goni as he's more usually referred to) - who is now in hiding in the United States, avoiding a campaign to bring him to justice (pictured).

Goni, having "somehow" acquired the smelter promptly sold it for $100 million to Swiss owned Compañía Minera del Sur (COMSUR). That's more than a nice little earner don't you think?

Now the Bolivian government, which is reaping the rewards of high tin prices due to rising demand from China, no longer has to hand the raw materials over to a multinational for smelting and export.

This is bound to bolster Morales' reputation as an opponent of neo-liberalism, mark him out as a clear break from the corrupt regimes of the past and, hopefully, the financial benefits will allow the Bolivian government to make further investments developing the infrastructure and pushing on with literacy, health and social programmes.


Renegade Eye said...

I'm still waiting for the final word on compensation.

Jim Jay said...

I don't think there's going to be commensation because of the dodgy financial dealings with Goni which probably were illegal and led to the smelter leaving state hands in the first place.

It's unlikely that this is going to be a model for other re-nationalisations which, so far, have taken the form of entirely legal renegotiations of contracts with multinationals.

Anonymous said...

I am with nationalizing Vinto.... Goni is a corrupt figure. Wish we as a country could put him behind. United Staes does not help the picture, refusing to have Goni come back to Bolivia, to face our courts.
In the other hand, I hope Evo does this right and in a wise way. This can really help or hinder Bolivia.

Jim Jay said...

Evo seems to be a pretty smart political operator - but he's caught between two forces and could easily bend to the right under pressure.

I think it's right to support what he's doing here - but unless the movements remain critical they wont be able to exert influence over "their" president

Bolivia Rising said...

The government will not pay Swiss mining giant Glencore International AG for nationalizing its Bolivian tin smelter earlier this month because the company illegally purchased the plant and failed to invest in its upkeep, President Evo Morales said Thursday.....

Jim Jay said...

Thanks for that - as I say it's very unlikely that Evo will pay compensation