ANALYSIS-Global miners OK with new Bolivian constitution

LA PAZ, March 10 - Global miners vying for Bolivia's mineral riches -- including world class lithium and silver deposits -- say new laws giving the state more sway over their operations are not likely to endanger investments.

Bolivia, governed for the past three years by leftist Evo Morales, the nation's first indigenous president, voted in a new constitution in January that forces mining companies to sign new operating contracts allowing state mining company Comibol to oversee their activities.

Mineral-rich Bolivia has given miners a year to sign the new contracts giving the state a say in how their operations are run, but companies believe that the plan does not spell trouble for them.

"The constitution has not altered Comibol or the Cooperative's mining rights as they relate to (Coeur's subsidiary) Manquiri's rights," a spokesman with Coeur d'Alene Mines Corp, which runs the vast San Bartolome silver mine, told Reuters, adding that the constitution should not pave the way for Comibol to demand more control over its operations.

Coeur's mining rights arise from direct lease agreements with Comibol and subleases with groups of independent miners or "cooperatives," which in turn received their mining rights from Comibol.

The San Bartolome mine is expected to produce approximately 9 million ounces of silver this year, worth about $113 million at today's prices of $12.50/ounce.

RECORD OF NATIONALIZATIONS

Morales has nationalized energy, mining and telecommunications companies. Despite anti-capitalist rhetoric, however, the mining ministry says it does not want to scare investors away.

"(The constitution) says that natural resources must be managed by the state ... (therefore) all mining operations have to be administered by Comibol," Mining Director Freddy Beltran told Reuters.

But he said the government does not aim to increase taxes or introduce measures that could hurt foreign mining investors.

"We don't want to nationalize, or to make private companies go bankrupt."

Beltran said some executives are "concerned," while other "have questions" about giving Comibol a say in how their operations are run.

But he said only companies or individuals with idle mining concessions need worry.

"Eighty percent of those who have mining concessions are not extracting minerals ... If they don't mine, then their contracts will be rescinded," he said.

BIG COMPANIES NOT WORRIED

The biggest global miners involved in Bolivia, a poor but resource-rich country located at the heart of South America, are Japan's Sumitomo, which controls the San Cristobal silver-lead-tin project, and Coeur d'Alene.

Swiss commodities trader Glencore, U.S.-based gold miner Newmont, Canada's Apogee Minerals and Pan American Silver are also in Bolivia.

Most miners consulted by Reuters reported good relations with the Bolivian government, and said they did not expect a turn for the worse with the new constitution.

"The Bolivian government considers Pan American's (contract) model to be the one they want most companies to conform to," said Kettina Cordero, who runs investor relations at Pan American Silver.

The company, she added, "does not have any issues" with the government.

"I'm not worried at all," said Joaquin Merino, vice president for exploration at Apogee Minerals. "The most pressing problem is to finance the company so that we can move forward."

The company has invested $7 million in exploration for a medium-sized silver project and plans to carry out feasibility studies this year before deciding how much more to invest.

"This is a three-year-old government and we have been able to work and explore without any hassle. What could really harm the mining industry ... is the international economic crisis, and we can't blame the government for that," Merino said.