Bolivia reported ready to increase mining taxes 600%

From Reuters
Sunday, January 7, 2007

http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reut...

LA PAZ, Bolivia -- Bolivia plans to raise the taxes paid by mining companies six-fold in a shake-up of the industry set to be announced in the coming weeks, a newspaper reported on Sunday, citing the country's mining minister.

Mining Minister Guillermo Dalence was quoted as telling the daily La Razon that the leftist government of President Evo Morales had received $45 million in tax revenue on mining exports of $1 billion in 2006.

"That's a ludicrous amount taking into account that these are not renewable resources. If in 2007 we were to export $1 billion worth of minerals again, the state should receive at least $300 million," Dalence was quoted as saying.

That would represent an increase of more than 600 percent on the mining industry tax take he described for 2006.

"That should be the aim of the new taxing system," he added, according to the report.

The tax increase is part of a new mining policy Dalence is due to announce before the end of January, La Razon said.

Morales nationalized Bolivia's energy industry in May 2006, and officials have repeatedly said they wanted to reform the mining industry and were considering tax rises.

In late October Morales appeared to back away from a similar nationalization for the dilapidated mining sector, postponing major reforms until 2007 due to a lack of funds.

The government has organized several workshops and seminars in January so officials from state-owned mining company COMIBOL, representatives of mining cooperatives, and experts can take part in shaping the new mining policy.

The plan aims to revitalize COMIBOL and modernize Bolivia's dilapidated mining industry, which has significant deposits of tin, zinc, wolfram, lead, silver, and gold.

Late last year Dalence said the reforms would not include expropriations and would not constitute a nationalization.

U.S.-based mining companies Apex Silver Mines Ltd. and Coeur d'Alene Mines Corp. are expected to start production in two multimillion-dollar mining projects in the poor South American country this year.

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