Minister: Complementary mining tax must increase

- Tuesday, February 15, 2005

Minister: Complementary mining tax must increase

Bolivia's government has not set a deadline for changes in the complementary mining tax (ICM) but the tax must be increased, Bolivia's new mining minister Jorge Espinosa told BNamericas.

However, the increase will be carried out "in a logical and reasonable way," he said.

The idea is to establish a rate "that comes from the ore prices in the international markets so that the sector will not be so affected," he added.

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Despite the fact that miners registered in local cooperatives disagree with this measure, "the largest producing sector - the national association of mid-sized miners - agrees as long as it [the tax increase] is rational and comes from a study. This is exactly what is being done," he added.

Espinosa is the first mining minister since 1993, when President Gonzalo Sánchez de Lozada abolished the position and created the economic development ministry, which encompassed the mining undersecretary.

EL MUTÚN

The progress of the El Mutún iron deposit in Bolivia's Santa Cruz department has aroused great expectations as the gas pipeline that goes to Brazil from Bolivia passes a few kilometers from the deposit, providing cheap energy for its operation, the minister said.

"The tender process is under way, there are many international companies interested and this month many have already visited the area," he said.

The El Mutún tender should be finished in August 2005.

COMSUR AND GLENCORE

As to how the tax increase will affect local mining company Comsur, which was recently acquired by Swiss mining and trading company Glencore, the minister said that state mining-metals company Comibol had already requested more information about the agreement.

Comsur currently has three contracts with Comibol.

Glencore has officially announced its acquisition of all Comsur group shares, but said it would not be changing Comsur's legal capacity or status and would maintain all its contractual and legal obligations and keep the workers on, Espinosa said.

"This is Glencore's statement. Nevertheless, Comibol is asking Glencore for the corresponding documents," the minister added.

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