Events took a dramatic turn for a Vancouver silver miner in Bolivia last week as its contract workers were taken hostage by protestors. One protester was killed in the ensuing rescue operation, and the mining concession is now threatened with nationalization.
South American Silver Corp. (TSX:SAC) has invested $16 million developing the Malku Khota project in Bolivia, which the company describes as “one of the world's largest undeveloped silver-indium-gallium deposits.”
But in mid-June, the company reported that a small group of “illegal artisanal” miners had been occupying the property and fomenting opposition to the project among other local indigenous people.
“Groups associated with this illegal artisanal mining activity have joined with activists from outside the local community and have recently held protests in La Paz and are now protesting near the project site,” the company said in June.
The situation grew violent last week, after government forces went in to rescue Bolivian law enforcement officers and mine contractors taken hostage by a local group of indigenous people opposed to the silver mine.
One of the mine’s opponents was killed during the rescue operation, according to a company press release.
Three drill contractors and a Bolivian government prosecutor were freed in the operation, but one policeman and two Bolivian employees of South American Silver were kept hostage until Monday then released.
Meanwhile, Bolivian President Evo Morales suggested Sunday his government is now considering nationalizing the property, according to Reuters.
In an email to Business in Vancouver, South American Silver CEO Greg Johnson said the Bolivian government has said consultation with local indigenous communities will need to be undertaken “to determine the direction of the project.”
“There is no change in the status of the project and South American Silver continues to hold the concession,” Johnson said. “We are optimistic that the project will be able to proceed in a way that will benefit all local communities. We are working hard with government officials at all levels to make sure that happens.”
South American Silver insists its Malku Khota project has the support of the majority of indigenous landowners in the area.
