Glencore International recently received a signed Supreme Decree from the Government of Bolivia, nationalizing the Colquiri mine in the Bolivian province of La Paz, with immediate effect. The company said its immediate focus is to seek an orderly handover of control of Colquiri with the Bolivian authorities and to ensure the well-being of its staff. Colquiri has been developed and operated, pursuant to rights granted by the Government of Bolivia, by Sinchi Wayra, a company owned by Glencore since 2005.

Glencore is protesting the action taken by the Government of Bolivia and reserves its rights to seek fair compensation pursuant to all available domestic and international remedies. The Colquiri mine has paid royalties, taxes and fees to the Bolivian State of more than $70 million, according to Glencore. Payments from all of its operations to Bolivia and Comibol have been in excess of $300 million. Capital investment across its operations in Bolivia has totaled more than $80 million ($22 million in Colquiri).

The Colquiri nationalization was announced just as Glencore was finalizing the renegotiation of its mining contracts with the Bolivia. The new agreement would have provided for a state participation of up to 55% of the profits (increasing the total government take to 77%-79%), and would have included further investment commitments from Glencore of more than $160 million over the next five years, of which at least $56 million alone would have been invested in the Colquiri mine.

To date, Glencore has invested over $250 million in the Bolivian mining industry and wider economy, the company said in a prepared statement. “Our investment provides several communities with jobs, education, access to healthcare and improved infrastructure. The action taken by Bolivia will pose a number of serious questions relating to the government’s future policy towards foreign investment in the mining sector.”