LATIN AMERICA SPECIAL — Bolivia is poised to benefit from

Having enjoyed more then 10 unbroken years of democratic government and offering some of the most favorable investment rules in Latin America, Bolivia looks increasingly promising to mineral investors.

Bolivia is a relatively underdeveloped country that contains a variety of mineral deposit types ranging from Tertiary red-bed copper deposits to Precambrian sulphide deposits. However, the country is best known for its huge hydrothermal silver and tin deposits in the Eastern Cordillera. Bolivia currently hosts the world’s largest silver mine, Cerro Rico de Potosi, and the world’s largest hard rock tin deposit at Llallagua. The mineral deposits of Bolivia occur along the same continental structure that hosts the major porphyry copper deposits in nearby Chile and the great polymetallic deposits of neighboring Peru.

Prior to 1985, foreign investment in Bolivia was limited because of a lengthy history of political instability. In 1985, the country moved towards a full market economy, which resulted in the establishment of new investment rules and a shift towards the privatization of the tin mines that had been nationalized in 1952. The new investment rules include no restrictions on capital or profit repatriation, no tax on reinvestment of profits, 30% maximum tax on net profits and a 13% value added tax.

One of the most significant new mining developments in the country is Battle Mountain Gold’s (NYSE) US$164 million investment to expand the Kori Kollo gold mine about 150 km southeast of La Paz. Reserves at the mine total 48.2 million tonnes of 2.32 grams gold per tonne and 14.5 grams silver. Tucson-based Arimetco International (TSE) has two active projects in Bolivia, the Cuprita project and the Andacaba mine. At Cuprita, the company is hoping to build a solvent extraction-electrowinning plant to treat an estimated 4.5 million tonnes of oxide ore grading 2% copper.

Arimetco is planning to invest $2 million at the Andacaba lead-zinc-silver mine to increase daily production from 45 to 360 tonnes per day by 1994. Known reserves total about 670,000 tonnes at 10.5% zinc, 3.3% lead and 364 grams silver. The property also contains potential geological reserves of 3.45 million tonnes.

Also active in Bolivia is Vancouver junior Orvana Minerals (TSE) which, along with Merwin Bernstein of Santiago, Chile, has entered into an agreement with Bolivian mining company Empresa Minera Unificada S.A. to conduct regional exploration for gold and copper over a large area in the western part of the country.

Other private sector companies working in Bolivia include Rio Tinto Zinc, Cominco (TSE), Minnova (TSE), Asarco (NYSE) and Cyprus Minerals (NYSE).