LA PAZ – An international arbitration court ruled in favor of the left-leaning government of Bolivian President Evo Morales in a long-running spat with mine South American Silver over the expropriation of a silver mining concession, Bolivia´s attorney general said on Thursday.
The Bermuda-incorporated miner, now owned by Canada´s Trimetals Mining, had asked for $385.7-million in compensation after the Andean nation revoked its concession on the Malku Khota mine project. But the Hague-based Permanent Court of Arbitration ruled Bolivia should pay South American Silver only $18.7-million, Bolivian Attorney General Pablo Menacho told reporters on Thursday.
ADVERTISEMENT
"Bolivia did not violate its obligation to provide full protection and security to foreign investment," Menacho said. "This is an outright victory for Bolivia."
The sprawling silver-indium-gallium deposit was expected to produce some 13.2-million ounces of silver a year.
ADVERTISEMENT
South American Silver charged that Morales´ government failed to protect its investments and had unjustly expropriated its concession. The miner had previously rejected an $18 million offer from Bolivia to buy out its rights.
TriMetals Mining could not be immediately reached for comment.
Bolivia has contended the Canadian miner had violated the country´s environmental rules and incited unrest among its indigenous neighbors.
In 2012, Morales signed a deal with protesters concerned about the environmental impacts of the project, stipulating that the government take back all the concessions granted to South American Silver's local subsidiary.
At the time, South American Silver, which said it had invested $16-million in the project since 2007, vowed to seek recourse using any legal and diplomatic means available.
Mining has played a key role in Bolivia's economy since the colonial era. The Andean nation mainly produces tin and silver, but also is home to the world's largest undeveloped lithium and potassium resources.
Morales´government has previously overhauled mining laws to bolster the state's role in the industry and give it a bigger slice of the sector's profits. 