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Viewing cable 06LAPAZ1673, NATIONAL DEVELOPMENT PLAN PROPOSES MINING SECTOR

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Reference ID Created Released Classification Origin
06LAPAZ1673 2006-06-21 18:15 2011-08-25 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy La Paz
VZCZCXYZ0042
RR RUEHWEB

DE RUEHLP #1673 1721815
ZNR UUUUU ZZH
R 211815Z JUN 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC 9692
INFO RUEHAC/AMEMBASSY ASUNCION 5940
RUEHBO/AMEMBASSY BOGOTA 3257
RUEHBR/AMEMBASSY BRASILIA 7104
RUEHBU/AMEMBASSY BUENOS AIRES 4357
RUEHCV/AMEMBASSY CARACAS 1648
RUEHPE/AMEMBASSY LIMA 1642
RUEHME/AMEMBASSY MEXICO 1731
RUEHMN/AMEMBASSY MONTEVIDEO 3863
RUEHQT/AMEMBASSY QUITO 4282
RUEHSG/AMEMBASSY SANTIAGO 8830
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF INTERIOR WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
UNCLAS LA PAZ 001673 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR WHA/AND LPETRONI 
COMMERCE FOR JANGLIN 
TREASURY FOR SGOOCH 
 
E.O. 12958: N/A 
TAGS: EMIN EINV ECON BL
SUBJECT: NATIONAL DEVELOPMENT PLAN PROPOSES MINING SECTOR 
CHANGES 
 
REF: LA PAZ 1660 
 
1. (SBU) Summary: Bolivia's national development plan, 
announced June 16 (reftel), proposes wide-ranging changes in 
the mining sector, among them increased state control of 
mineral production and sales and new taxes and regulations. 
The plan highlights the need for more research into available 
mineral resources, calls for greater industrialization and 
diversification, and urges enhanced support for small and 
cooperative mines.  U.S. company executives told Econoff June 
19 that the strategy appears to follow agreements reached by 
a tripartite commission of miners, GOB officials, and 
Comibol, the state-owned mining company, but said they 
remained worried that eventual changes may harm an industry 
already weakened by political and economic uncertainty.  End 
summary. 
 
2. (U) Bolivia's national development plan, announced June 16 
(reftel), proposes wide-ranging changes in the mining sector, 
primarily through a "new model" of state intervention that 
promotes industrialization and improved use of mineral 
resources.  The plan proposes a new law to permit state 
involvement (largely through an expanded Comibol, the 
state-owned mining company) in all aspects of mining, from 
concession assignments to mineral production and sales.  The 
strategy encourages changes to mining concessions to prevent 
their "inefficient" use and suggests the GOB empower state 
entities to supervise mineral sales and exports.  Further, 
the plan declares the sector's existing legal framework 
"insufficient" and urges new taxes and regulations - but 
provides few details. 
 
3. (U) The plan highlights the need for more research into 
available mineral resources, calls for greater 
industrialization and diversification, and urges enhanced 
support for small and cooperative mines.  The strategy 
emphasizes the need for broader geological studies and more 
exploration.  It also encourages the production of 
value-added goods (as opposed to raw materials), states the 
GOB's desire to "see to completion" investments in San 
Cristobal, San Bartolome, and other mines (the first two are 
U.S.-owned), and expresses the GOB's intent to construct new 
processing facilities.  Finally, the strategy promises to 
strengthen small and cooperative mines by introducing new 
technologies, providing technical and financial assistance, 
and improving environmental management. 
 
4. (SBU) U.S. company executives told Econoff June 19 that 
the plan appears to follow agreements reached by a tripartite 
commission of miners, GOB officials, and Comibol, the 
state-owned mining company, but said they remained worried 
that eventual changes may harm an industry already weakened 
by political and economic uncertainty.  Company 
representatives characterized the commission's 
recommendations as favorable but noted that its findings - 
and the plan itself - lacked specifics, in many cases leaving 
decisions to the upcoming Constituent Assembly, where 
outcomes are far from certain.  Executives lamented the 
sector's prevailing uncertainty and complained that it 
delayed investment decisions and complicated even short-term 
planning. 
 
5. (SBU) Comment: The national development plan appears to 
re-state earlier GOB declarations concerning mining; as such, 
the plan did not stoke the fears of sector representatives, 
but neither did it do much to alleviate them.  Given the 
plan's lack of detail, company executives will have to 
continue to wait for clarification.  End comment. 
GREENLEE