Apogee says draft of Bolivian mining code is positive

While Bolivia’s new mining code is not slated to become law until July 20, Apogee Minerals (APE-T) issued a release last week outlining their interpretation of a draft of the code.

The Toronto-based company has all of its assets in the silver and zinc regions of Bolivia, and it calls the government’s proposals “extremely positive.”

The draft comes as a result of a commission made up of the Ministry of Mines and Metallurgy, the Federation of Mining Co-Operatives of Bolivia, and the Mine Workers Federation of Bolivia.

Apogee and other mining companies with major assets in Bolivia have not seen their shares make a full recovery since Bolivia’s president, Evo Morales, made comments in early May regarding the nationalization of the country’s natural resource sector.

Apogee’s president and chief executive, John Carlesso, says in a press release, the company has informed the Minister of Mines and Metallurgy of its support for the key points in the proposal.

Highlights of the draft as outlined by Apogee are as follows:

• The scale of the complementary mining tax (ICM) will not change.
• Companies have the option to increase their profit tax to 30% from 25% in exchange for a 10-year guarantee of stability.
• Companies with mining investment in excess of US$100 million can execute a 20 year “stability contract” with the Bolivian government.
• A single mining concession will be limited to 25,000 ha.
• A three-year time limit to start exploration activities once a concession has been granted.
• Annual concession fees will be doubled every five years.
• Programs will be put in place to ensure ongoing worker training.
• Measures will be installed to discourage and penalize corruption.

In Toronto on Wednesday June 7, the company’s shares were trading at 91, they had fallen as low as 80 in early May as a consequence of Morales’ comments.