Bolivia ruled out paying compensation to South American Silver (SAS) on Wednesday, two months after its leftist government nationalized a mine operated by the Canadian firm.
“The nation has no financial obligation to South American Silver,” Mining Minister Mario Virreira told reporters.
Bolivia’s President Evo Morales expropriated the silver and indium mine managed by a local unit of SAS on Aug. 2, in a move strongly criticized by the Canadian government and foreign investors.
An SAS subsidiary said it has had a contract since 2007 to run a mine in the community of Malku Khota in southwestern Bolivia, around 340 kilometres south of the capital La Paz.
But Mr. Virreira insisted there was “never any document establishing that the Bolivian government had a contractual relationship” with SAS.
SAS has said that if no settlement is reached, it would seek international arbitration to settle the dispute.
Since Mr. Morales came to power in 2006, Bolivia has moved to nationalize firms deemed strategic, and in June he raised the possibility of making all natural resource-related industries property of the state.
The decision to expropriate the Malku Khota mine came after weeks of protests at the site by indigenous leaders calling on La Paz to take it over.
The Malku Khota project boasts one of the world’s largest untapped resources of silver and indium, a rare metal used in flat-screen LCD televisions.
South American Silver had planned to invest $50-million by 2014 in the mine, which also explores deposits of gallium, a mineral used in microelectronics.Report Typo/Error