Bolivia’s President Evo Morales is considering nationalizing South American Silver Corp’s Malku Khota property, with reserves estimated at over 230 million ounces of silver in the wake of last Friday’s deadly protests.
We have repeatedly warned readers that government nationalization of mining companies is a MUCH LARGER current risk than is confiscation of physical gold or silver. You are witnessing a prime example, as South American Silver shareholders are receiving a beating today (down 30%), which will obviously intensify should Morales in fact nationalize the mine.
From Reuters:
Bolivia will consider nationalizing Canadian miner South American Silver Corp’s silver property, President Evo Morales said on Sunday, following violent indigenous protests against the mining project.
Leftist Morales, who last month took control of global commodities giant Glencore’s tin and zinc mine in the Andean country, said he hadn’t taken a final decision on whether to revoke the Canadian miner’s concession.
“Nationalization is our obligation, I already raised the issue of nationalizing (the Malku Khota project) last year, and I told (local residents) to reach an agreement, because when they want we’re going to nationalize,” Morales told a farmers’ gathering.
Exploration work, in which South American Silver plans to invest some $50 million, is expected to end within three years. The company describes it as “one of the world’s largest undeveloped silver, indium and gallium deposits.”
South American Silver’s response:
On Sunday the Bolivian Labor Minister, Daniel Santalla, signed an agreement to secure the release of the final three detained individuals with the indigenous opponents to the project. As part of this agreement the opponents were seeking cancellation of the mining concession, however, the government minister acknowledged that this could be difficult due to the original decree giving South American Silver the rights to the project.
Also on Sunday, President Evo Morales and the Government Minister Carlos Romero agreed that a “prior consultation” among all indigenous communities in the project area would be needed to proceed to determine the direction of the project based on the consensus view of all communities.
At this time there has been no change in the status of the project concession. The Company is continuing to work with the government at all levels and with the local communities to agree on an approach to development that is inclusive of all communities in the project area and allows development of the Malku Khota project to its fullest potential.
As noted in earlier updates, Bolivian government authorities have previously stated that there will be a period of constitutionally mandated consultation with local indigenous communities before the project enters the extraction phase.
On May 28 the Mining Minister Mario Virreyra signed an accord with 43 out of 46 indigenous communities in the project area specifying that the state will not reverse the mining concession and stating that the company should continue exploration activities and that Bolivian authorities should provide increased police security in the region.
The vast majority of the indigenous groups in the project area have formally demonstrated their support for the project and understand the social and economic benefits to their communities that the development of a world class, modern mine at Malku Khota will bring and which will create with thousands of well-paying local jobs.
By contrast, the artisanal mining that has been centered near one of three villages in opposition to the project would provide little economic benefit to the 43 other indigenous communities in the project area and has been cited by the Bolivian Mines Minister as causing local environmental damage.
South American Silver has worked closely with the local indigenous communities over the past several years providing significant direct employment on project related jobs, as well as jointly developing programs with the communities to facilitate job training, education, agricultural enhancement and water management for long-term sustainable development.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_silv.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_gold.gif)
is in the headlines—It’s a bad day when Silver is in the
headlines.
How dare they nationalize those mines away from foreign interest. Its the manifest destiny for milt-national corporations to own foreign resources. They spend money bribing officials and terminating others for non-mercantilism compliance.
I wonder when China will do the same for the factories that exist in their country. That will be the day when Apple goes crying back to Uncle Sam.
When countries nationalize mines it is for their own accumulation effectively removing production from the market. One step closer to ending the paper manipulation.
I wonder which KIng World News billionaire is going to be short a whole lot of sheckels due his ownership of this nationalized mine. Oh well, not my problem. I don’t trade paper. But like you said, 4 OZ, it’s good and bad news. Bad news for the owners, good news of silver supplies because as sure as sh** Morales and his people will screw the mine into the ground. Nothing against Bolivian mining abilities but they brought in the mining concession because that was the way the mine could be mined most effectively Now we will have one less mine producing silver. Governments are not very good at production of anything. Like the old saying goes, if the government was in charge of deserts we would have a shortage of sand in 2 years. This nationalization disease spreads like kudzu when it gets started and the irony of this nationalization is that it comes at a time when silver prices are in the tank. Not sure what the extraction costs are for the mine owner but I bet an ounce of phyzz the new owners cost structure will go up Besides which, did anyone not see this coming?
The more silver mines are nationalized, the more it will be worth. Any government sucks at efficiency. Look at this and the derivatives, the two together will spell an unusually high price in commodities. M45 has preached the last 5 – 6 moths to watch the derivatives. I think he is spot on!
The game of musical chairs is about to start for the miners
If you play in the miners ya better watch which chair ya sit in
because when the music stops
things will get interesting
FAST
Maybe they just figure after they nationalize it, they can count the millions of unmined silver ounces as “deep storage”?
Quick question. Should I not invest in any mining stocks that are based in these countries as a precaution?
4 oz, Argyrion, UglyDog, AG, 2oz, Da yooper, aragornsos: You all have grate input here. All different all real facts that are going to happen.
Burghday;
Let the Suckers do the hard work for them, then they step in and claim it under Eminent Domain or Nationalization. Sound Familiar? The Fed has been doing it for years, their buying ours and other Countries Debt and before you know it they will step up and demand payment at which point the Countries can’t, so the Elite whispers in their ears. Then New World Order Begins. Keep Stacking Folks.
The US has nationalized retirement plans, it’s call social security, agriculture, it’s call food stamps, health, it’s call Patient Protection and Affordable Care Act, Small business, it’s call OSHA, EPA and taxes. So are we different from Bolivia ?
In a word: The US nationalizes paper assets. Bolivia nationalizes metal assets. I bet is that Bolivia government will own it and hold it. The US government will be left with a bag of worthless FIAT. Stackers will have the hard assets and hopefully win the day.
In a word: The US nationalizes paper assets. Bolivia nationalizes metal assets. My bet is that Bolivia , the government will own it and hold it. The US government will be left with a bag of worthless FIAT.
Stackers will have the hard assets and hopefully win the day. The USG will have the greatest counterparty risk, holding air and nothing else that is real.
They can’t hold the people. We can own and hold ourselves with no counterparty risk. Like William Wallace said, YOU CAN’T TAKE MY FREEDOM!!!
lol AG;
Toby Keith – Courtesy of the red white and blue
AG;
Canada Day July 1 2010 – Oh Canada
Toby Keith is coming to Harvey’s in South Lake Tahoe on August 7th Whoo hoo. We have tickets Thanks for the links to the tunes 427 very cool!
Right On AG;
BTW everyone,
Just a fun fact: Silver gold mining year to date – S/G=0.942 or
374,000,000 oz. silver divided by 39, 700,000 gold = 0.942065
What a ratio, and currently they are trading at a ratio of 56 to 1. LMFAO as M45 so often says.
UPDATE 3-South American Silver shares slump on Bolivia mine rules
http://in.reuters.com/article/2012/07/11/southamericansilver-bolivia-idINL2E8IB59X20120711