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XMFSinchiruna (28.55)

A Heart-Breaking Headline

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57

April 14, 2011 – Comments (41) | RELATED TICKERS: CDE , PAAS

I will do some digging and report on this further tomorrow:

http://www.vancouversun.com/business/Bolivia+plans+expropriate+mines/4610801/story.html

Bolivia plans to expropriate minesMines were sold to private interests by earlier governments

Bolivia's President Evo Morales plans to expropriate zinc, silver and tin mines sold off by previous governments, an official said.

Morales will announce a decree May 1 to "dismantle the privatization model," said Nicolas Fernandez, a spokesman for state mining company Corp. Minera de Bolivia, known as Comibol.

"The government is recovering all the privatized companies," Fernandez said today in a telephone interview from La Paz. "When the decision is taken, Comibol will be ready to manage these mines."

Comibol may rescind contracts with companies including Glencore International AG, Pan American Silver Corp., and Coeur d'Alene Mines Corp., La Paz-based newspaper La Razon reported today, citing Comibol President Hugo Miranda.



 

 

41 Comments – Post Your Own

#1) On April 14, 2011 at 1:27 PM, portefeuille (99.75) wrote:

Evo habla de ‘recuperar’ las mineras privadas

Evo speaks of 'recover' the private mining

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#2) On April 14, 2011 at 1:42 PM, portefeuille (99.75) wrote:







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#3) On April 14, 2011 at 1:48 PM, portefeuille (99.75) wrote:

24 September 2010 - Mr. Evo Morales Ayma, President of Bolivia - Press conference

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#4) On April 14, 2011 at 1:50 PM, chk999 (99.98) wrote:

Venezuela will limp for a generation due to Chavez and Bolivia looks like it will do the same.

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#5) On April 14, 2011 at 2:13 PM, catoismymotor (67.86) wrote:

This is why it is important to diversify. Evil Craptastic Wannabes like this can swoop in an frack up your portfolio.

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#6) On April 14, 2011 at 2:17 PM, catoismymotor (67.86) wrote:

And somebody call Eric Estrada. Morales stole his hair!

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#7) On April 14, 2011 at 2:22 PM, jesusfreakinco (29.61) wrote:

That sucks... 

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#8) On April 14, 2011 at 2:37 PM, silverminer (42.18) wrote:

Thanks for posting those, Port.

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#9) On April 14, 2011 at 2:53 PM, ChrisGraley (31.81) wrote:

Just ended my green thumb on PAAS. Better to cash in now and get something rather than wait and get nothing.

Luckily, I don't have either in my portfolio. 

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#10) On April 14, 2011 at 3:04 PM, awallejr (80.08) wrote:

That's the concern about Peru too.

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#11) On April 14, 2011 at 3:37 PM, cbwang888 (25.87) wrote:

We are in the worldwide commodity war...

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#12) On April 14, 2011 at 3:52 PM, rofgile (98.99) wrote:

Why is this "heartbreaking" and why is Evo Morales an "evil craptastic wannabe"?

---

Maybe it isn't fair for rich 1st worlders to profit from the resource harvesting from a latin american country?  I can't say I feel any sympathy with investors making profits off of mines in third world countries.

 -Rof 

 

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#13) On April 14, 2011 at 3:54 PM, silverminer (42.18) wrote:

http://af.reuters.com/article/metalsNews/idAFN1416866220110414

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#14) On April 14, 2011 at 4:01 PM, FreeMarkets (99.25) wrote:

how do you guys embed videos?

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#15) On April 14, 2011 at 4:08 PM, skypilot2005 (< 20) wrote:

Nice pictures! 

Are you sure that isn't Al Gore on vacation there 30 years, ago?

I sold today at $37.25.  23.8% return on an ivestment made in October.

Sinch,

Thanks, for the alert.

 

Sky Pilot

 

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#16) On April 14, 2011 at 4:22 PM, silverminer (42.18) wrote:

rofgile

If you're going to cast that stone, let's see your real life portfolio then, rof. Let's see how free your own portfolio is of profits reaped through some advantageous harnessing of unfairly priced third world goods or labor.

Furthermore, let's ensure your real-life portfolio is free of any company relying upon stable supply of mined resources of any sort, since the implied corrollary to your statement is that no foreign investment into third world mining operations should be permitted. Copper would be $15 or $20 a pound, gold would be $3,000 (and we know that would drive you nuts!), silver would be $150, and cheap metals like lead and zinc would start to look precious.

So either your own portfolio is made up entirely of companies operating in the cloud, or you might really consider thinking before you post a hypocritical statement like that. Whether you are aware of it or not, your own investments are likely dependent to some degree upon mines in third world countries that would not exist without foreign capital.

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#17) On April 14, 2011 at 4:52 PM, SN3165 (< 20) wrote:

Sinch,

 Where else can you see this happening? 

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#18) On April 14, 2011 at 5:00 PM, silverminer (42.18) wrote:

SN3165

Ecuador and Colombia are jurisdictions I try to keep at arm's length due to similar sorts of risks, and Peru has an election upcoming with a lot at stake. Ultimately, though, as prices rise much higher, some form of nationalization (whether through massive mining taxes, required government ownership stakes, or through outright taking) is likely to become the rule rather than the exception.

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#19) On April 14, 2011 at 5:05 PM, alstry (35.66) wrote:

Silver is simply a form of money......money is simply a unit of human production.

Human production can be obtained three ways effectively:

1.  Love/Volunteer

2.  Barter/Silver/Gold/Currency

3.  Force/Steal

Do you really think the man holding silver can repel the government holding a gun?  The only way to stop it is men not accept silver for their production......or try to fight back like George Washington did.

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#20) On April 14, 2011 at 5:05 PM, rfaramir (30.58) wrote:

Glenco (the most affected company of the three it looks like) has a "Sinchi Wayra" subsidiary. Any connection to that "TMFSinchiruna" handle?

From the article: "Unions proposed returning mines to state control" Why am I not surprised? I learned more of the conspiring of elected officials with unions in Wisconsin than I ever wanted to know.

"Zinc and silver exports brought $1.57 billion into the poor South American nation last year." Bolivians can look forward to being even poorer for the next several years. Looting the producers does not produce prosperity, ever. Under new ownership the workers will be as inefficient as government workers everywhere. The new managers will work for political rewards, not profit. When will they learn? "Atlas Shrugged Part One" can't come soon enough...

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#21) On April 14, 2011 at 5:25 PM, silverminer (42.18) wrote:

rfaramir

Very astute: there absolutely is a connection. Sinchi is a Quichua word meaning "strong"; Quichua/Quechua being the language common to indigenous populations in the whole of formerly Incan territory, including Bolivia, Peru, Ecuador, and Colombia.

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#22) On April 14, 2011 at 5:29 PM, Gonzhouse (70.18) wrote:

In the previous post on a Scorecard for Junior Miners, it has a section for Political Risk, and this risk score can be a minus as well as a plus.

Anyone who just passed that off before is now doing a double-take.

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#23) On April 14, 2011 at 7:41 PM, rofgile (98.99) wrote:

silverminer:

 There would be metal resources whether or not some rich corporation is able to legally rob third world countries of their resource value.  Canada has plenty of resource exploration companies that have Canadian owners, and the Canadians are NOT happy about Chinese corporations attempting to merge or buy out those assets.  Similarly with Australia.  These nations were just better off, and able to protect their own resources.  In the USA we would freak out if China was mining our resources for their profit.

---

 There are places where mining can actually be an okay thing.  Afghanistan would benefit greatly if the local people could have mining related jobs rather than having to grow poppies.  

---

 Bolivia is now moving to pass a very interesting law, btw: "Nature has the right not to be polluted" - part of their rewriting of their constitutional law reflecting more indigenous spiritual beliefs:

 The draft of the new law states: "She is sacred, fertile and the source of life that feeds and cares for all living beings in her womb. She is in permanent balance, harmony and communication with the cosmos. She is comprised of all ecosystems and living beings, and their self-organisation."

 A little different than "In God we Trust".  :)

 You know, I can't feel even a bit of sympathy for mining investors who lose their shirts.  Screw em.  Because at least in countries like this, much of the profits come from not paying the costs of proper waste disposal or fair wages for the miners.  

 If resources cost more, would that be a bad thing? Nah. We'd be more careful about how we use them, we'd recycle them more efficiently and we'd use less of them.  

 -Rof 

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#24) On April 14, 2011 at 8:01 PM, rofgile (98.99) wrote:

My real life portfolio, for better or worse.

 AMSC (new as of 4-2011), DSCO (meh), EGLE, GILD, GOOG, MTW, NMM, STD, VWDRY.  

  I don't think GILD, GOOG, MTW are clearly ethically bad.  

  AMSC and VWDRY are wind power and energy grid.

  EGLE, and NMM transport resources across the world (I guess the ships are polluting, but its the current best method for moving wheat, coal, iron ore, etc).  

  STD is a bank, which is neither inherrently good or evil.  They operate in latin america and hopefully lend to good people.

 Would you show your real life portfolio, TMFsinchiruna?  Just for curiousity now - probably others would be interested too?  I don't claim to be an expert investor (only about year 3.5 now for me as an investor), and about half of my portfolio is meh (EGLE, DSCO blah!, AMSC).  MTW was good :) (I've been recommending that as my favorite company since before even March 2009..)

 Story: Some of my worst RL picks have been stocks like SIRI, VOD, MTW, and SCUR because I chose these before the crash of 2008.  Ironically some of my best were VOD, MTW, SIRI, and RF because I kept investing especially at the worst time throughout the crash and back up from 2009.  

  -Rof 

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#25) On April 14, 2011 at 8:03 PM, PainterPoker (21.44) wrote:

I agree with Rof.

 

Obviously. 

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#26) On April 14, 2011 at 9:17 PM, 5thand7th (< 20) wrote:

rof better forget about buying clothes, shoes, computers and everything built/made in third world countries where the wages are very very very low, and the workers are being exploited, and the companies are polluting, etc. etc.

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#27) On April 14, 2011 at 10:38 PM, awallejr (80.08) wrote:

No offense Rof, but rework your portfolio lol.  The only thing I like is MTW and maybe Goog (but I do have concerns over the anti-trust action) and Gild (no divvy tho).  Dump the rest and buy a little quality like maybe T, BBEP (for income), even CISCO.  Pick up some MRK (I like the idea that they are committed to R&D and still pays a nice divvy).  Some PM is good too.

Whatever other contries do is their business.  If they want to nationalize so be it.  Just understand that they won't get foreign investors rushing their shores.  If they can live with that, then fine. 

However it wouldn't surpise me that DSX and NMM pay their workers as little as they can get away with and you assume too much with STD.  I am sure they aren't lending to the local pig farmers, but probably the mining companies who can put up collateral.

It becomes a slippery slope when we start pointing fingers I suppose.

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#28) On April 14, 2011 at 10:41 PM, catoismymotor (67.86) wrote:

#20 & #21

These were fun to read.

 

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#29) On April 14, 2011 at 11:01 PM, silverminer (42.18) wrote:

rofgile

I have better things to do than waste my time with this dribble. You have no idea what you're talking about with respect to supply. If you remove global supply of copper, silver, lead, zinc, etc. that is mined in less developed nations by foreign operators, you would have acute shortages leading to unimaginable price increases ... including for prodducts incorprated into your AMSC's semiconductors, your GOOG's phones, and the ships built for your dry bulkers. And so, if you're profiting from any of those stocks, then you are likewise profiting from the inexpensive raw materials available because large-scale miners are permitted to mine where the choicest resources lie. For better or for worse, that is our present reality.

So, let's end this conversation by having you dismount from your high horse and recognize the hypocrisy of your unwelcome disdain for mining investors.

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#30) On April 15, 2011 at 12:01 AM, rofgile (98.99) wrote:

awallejr:

 I am sure ethically investing is a slippery slope.  Basically, all companies are shades of grey - but everyone should have some line that they draw on what is morally right or wrong.  For instance, I was an investor in Nokia, and thought that was a pretty safe choice.  Then I found out that Nokia and Siemens had sold out to the Iranian government to provide surveillance (used to find and hurt protestors) of their citizens.  That sucks and I don't think that should be rewarded.

 I would think the dry bulk shippers are probably the most ethically ambiguous of my real life holdings as well. 

 silverminer:

  I draw the ethical line in investing with tobacco, mining, and weapons companies.  I think these do direct harm to the world in their pursuit of profits.  Yes, there is an indirect web where everything is connected as one large system.

 You could argue along those lines that M-16 manufacturers are fine to invest in, because we are all protected by the US military.  Or you could argue that tobacco companies are fine investments because the farmers are helped.  Or you could argue that investing in Peruvian gold mines is okay, because the "world needs gold".

 But that overlooks that the M-16s are going to murder people.  The tobacco is going to cause cancer and heart disease for hundreds of thousands and addictions.  The Peruvian gold mines are going to pollute the rivers with cyanide, mercury - and many local people doing the mining are going to be working the mercury amalgamate with their bare feet, and burning the mercury into the air (and their lungs) to recover the gold.

 So, I say, don't invest in that.  And its good that that "easy money" gets taken away once and awhile by karma.

 -Rof 

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#31) On April 15, 2011 at 12:29 AM, rofgile (98.99) wrote:

Here is a video of Goldcorp's effects in Honduras:

A very interesting, if disturbing video, of how artisanal gold mining works in latin america (as compared to the large companies.. this is also quite nasty!)  Notice the workers spreading mercury with bare hands.  Notice the burning of mercury into the air. 

 

Would you want any of your family or friends to work in these jobs? 

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#32) On April 15, 2011 at 1:03 AM, MoneyWorksforMe (< 20) wrote:

TMFSinchurina,

How do you think this impacts the price of silver going forward? 

A government takeover of several major mines would most certainly result in less supply coming to market, which could lead to higher silver prices going forward... do you agree?

Do you have any thoughts as to which other countries may be vulnerable to this?

Thanks in advance... 

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#33) On April 15, 2011 at 1:11 AM, awallejr (80.08) wrote:

'Would you want any of your family or friends to work in these jobs? "

Nope. I would want my family to be doctors or lawyers or corporate investors (sports players would be cool).  But that doesn't mean that miners or ship workers are losers. You acknowledge that your shipping holdings are ethically ambiguous.  End of story. Your point then is a matter of degree?

 

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#34) On April 15, 2011 at 1:17 AM, ag77840 (21.00) wrote:

I'd also love to get your opinion on any global effect on the supply from this event. It seems that any subsidization would steer PM prices upward due to supply fears. Are the price increases just paving the way to more South American countries following Bolivia's lead?  

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#35) On April 15, 2011 at 1:23 AM, silverminer (42.18) wrote:

rofgile

At least now I know why you have been ceaselessly bashing gold and related investments here on CAPS at every opportunity ... I just wish you had been more honest from the start in revealing that your disdain arose from a rickety paradigm of ethical repugnancy and a convoluted air of karmic superiority.

For the record, I do consider the human and environmental impacts of modern large-scale mining operations a topic of immense concern, and these matters are indeed very personal to me given my own professional background as an applied anthropologist who struggled for years to defend trpoical rainforest habitats and the interests of indigenous populations. I have written about my own internal sense of conflict regarding these matters at length, but it is up to each individual to square their own investments with their own moral compass by means that are wholly their own ... it is for no one else to preach in the judgemental and hypocritical way you have done above.

So while you're busy preening, waxing, and buffing your own self-assuredly flawless karma, kindly remove your highly insulting boot from my karma's backside.

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#36) On April 15, 2011 at 2:59 AM, mhy729 (39.38) wrote:

Coeur Manquiri Receives Assurance from Morales Administration That San Bartolomé Not Subject to Nationalization

COEUR D’ALENE, Idaho--(BUSINESS WIRE)--Coeur d’Alene Mines Corporation (NYSE:CDE)(TSX:CDM) today announced that it has received assurances from the Morales Administration in Bolivia that its San Bartolomé mine is not subject to any proposed nationalization in Bolivia.

“During a meeting Thursday with Bolivian Mining Minister Jose Pimentel, the Minister assured Coeur Manquiri and members of the Federation of Mining Workers Trade Union (FSTMB) that Manquiri will not be nationalized,” said Humberto Rada, President of Coeur South America and Coeur Manquiri, the subsidiary of Coeur that operates San Bartolomé.

( get the rest here:  http://www.businesswire.com/news/home/20110414007154/en/Coeur-Manquiri-Receives-Assurance-Morales-Administration-San )

I still hold a small stake in CDE so this is welcome news.  Nothing on Glencore or PAAS though.  On a tangent, Glencore's IPO is expected in May.  Glencore International AG is a Swiss-based company, which is one of the world's largest suppliers of commodities and raw materials, and is also among the world's largest privately held companies.  Financial Times ( FT.com ) has good coverage on the company and the planned IPO:  http://www.ft.com/cms/s/0/9cdc1ec4-6665-11e0-ac4d-00144feab49a.html#axzz1JZLq4s2m

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#37) On April 15, 2011 at 10:17 AM, Jbay76 (< 20) wrote:

For the record, being a latino born and raised, having lived in 3rd world countries and US territories (which are really 3rd world countries for the most part), I've seen laborers do similair things as noted on comment #31.  Spraying pesticides with no shirt on and barefoot becuase its hot and they either can't afford shoes or its not part of their culture (think S. Pacific).  Many people don't think of the consequences as much as the paycheck they get from doing the job.

Granted there can the incident where the boss knows and doesn't tell the workers or provide the PPE for them. Nonetheless comment #31 can be chalked up to culture as much as industry

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#38) On April 15, 2011 at 11:53 AM, DarthMaul09 (30.41) wrote:

Coeur d’Alene Mines Corporation (NYSE:CDE)(TSX:CDM) today announced that it has received assurances from the Morales Administration in Bolivia that its San Bartolomé mine is not subject to any proposed nationalization in Bolivia.

“During a meeting Thursday with Bolivian Mining Minister Jose Pimentel, the Minister assured Coeur Manquiri and members of the Federation of Mining Workers Trade Union (FSTMB) that Manquiri will not be nationalized,” said Humberto Rada, President of Coeur South America and Coeur Manquiri, the subsidiary of Coeur that operates San Bartolomé.

Coeur has maintained that its property rights at San Bartolomé are not the subject of expropriation. The Company operates the mine in Potosi where title already belongs to Bolivia and backed by Presidential Supreme Decree.

It is nice to have powerful friends.  Someone must have told Morales that China had made a significant investment in CDE.

 

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#39) On April 15, 2011 at 12:11 PM, Schmacko (91.51) wrote:

#18) "Ecuador and Colombia are jurisdictions I try to keep at arm's length due to similar sorts of risks, and Peru has an election upcoming with a lot at stake. "

Venezuela, Bolivia, Ecuador, and Peru if Humala wins are the South American repo states to look out for.

I wouldn't worry about Colombia under Santos.  He'll prob keep down the same path as Uribe pursuing free trade agreements and direct foreign investment in the country and staying relatively business friendly.

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#40) On April 16, 2011 at 1:41 PM, mike2004 (< 20) wrote:

"Coeur d’Alene Mines Corporation (NYSE:CDE)(TSX:CDM) today announced that it has received assurances from the Morales Administration in Bolivia that its San Bartolomé mine is not subject to any proposed nationalization in Bolivia."

Looks like CDE might pop quite nicely next week because of the above

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#41) On April 17, 2011 at 4:13 AM, FleaBagger (33.53) wrote:

rof - The only way for a desperately poor country like Honduras (from your video) or Bolivia (from Sinchi's news story) to become a richer, healthier country, is to accumulate capital. That is literally the only way. There's no magic karma that's going to make nicer people and countries richer and healthier. Just capital accumulation. It's been the only way for a country to get richer in the past, and it's going to be the only way for a country to get richer in the future. Not sending foreign aid down there, or sponsoring children. Not preaching or selling your mining shares. Not holding a fancy liberal fundraising soiree or collecting coins in those nifty cans with the coin slots in top. Just capital accumulation. The way capital accumulates is by investing. Most of the investment in a poor country is foreign investment. Most foreign investment stops when the regime starts expropriating the capital that was paid for by foreign investment. Celebrating such expropriations is therefore like celebrating another 20 years of abject poverty and disease. Yay destitution!

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