Bolivia, Venezuela to create state-led mining company Minersur

Rio de Janeiro (Platts)--24May2006

Bolivia and Venezuela will create on Friday a bi-national, state-led
mining company known as Minersur, Bolivian government officials said
Wednesday. The company will be charged with "exploiting minerals all around
Bolivia," according to government news agency ABI on Wednesday. Bolivian
government officials have said that the mining interest will be created on the
visit to Bolivia of Venezuela's President Hugo Chavez, a close ally of
Bolivia's leftist President Evo Morales.

Few details were available regarding Minersur and what its role will be
in Bolivia. Planning Minister Carlos Villegas has said that Bolivia's state
companies do not plan to fully nationalize the country's mining and metals
industry, but the state does plan to gain more control over mining provinces.
This has led to investor jitters reflected in recent share price drops for
companies like US Apex Silver, which is developing the San Cristobal silver
project in Bolivia, and other private firms active in Bolivia, including
US-based Coeur D'Alene, the world's top primary silver producer.

The governments are forming the new sate-led company as Bolivia seeks to
auction off its huge eastern iron ore province of El Mutun, with companies
including India's Jindal Ltd; Mittal Steel, owned by Indian magnate Lakshmi
Mittal; and Argentina's Techint-Siderar are all in the running to gain a
mining concession for El Mutun. The concession will require at least $1.5
billion in new investment, Villegas said this week.

Minersur has no designs on the El Mutun concession, Villegas said. A
winner for the El Mutun concession may be chosen as early as May 30.

--Joshua Schneyer, newsdesk@platts.com

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