BOLIVIA Law and Practice Contributed by: Ramiro Guevara, Jorge Inchauste and Rosario Echeverría, Dentons Guevara & Gutiérrez S.C.
According to the report made by the Ministry of Mining, the Bolivian State invested USD500 million in 2022 and 2023 for the construction of zinc treatment plants in Oruro and Potosí, and for the execution of different projects in COMI - BOL, Empresa Minera Colquiri, Empresa Minera Huanuni, Empresa Siderúrgica del Mutún and Empresa Metalúrgica Vinto. Another important sector is the mining co-oper - atives, which are financed with a special fund created by the state ( Fondo de Financiamiento para la Minería – FOFIM ) and reached 31% of total silver production. 5.5 Role of Domestic and International Securities Markets in the Financing of Exploration, Development and Mining The Bolivian securities market has not been used for the financing of mining projects, and no Bolivian mining companies are currently traded on it. However, there are tax benefits in using the Bolivian Stock Exchange as it will exempt any capital gains resulting from the sale of stock through the Bolivian stock exchange of any Bolivian listed companies. Foreign security markets, however, have been used quite successfully in the past for the financ - ing of exploration, development and mining pro - jects in Bolivia. The expectation is that this will be a growing trend in the next couple of years, with many projects currently being developed so as to be able to be listed on foreign exchanges. 5.6 Security over Mining Tenements and Related Assets As discussed in 1.5 Nature of Mineral Rights , Article 93 of the Mining and Metallurgy Law provides that mining rights do not grant own - ership or possession rights over mining areas, and that holders of mining rights are not able to
grant leases or mortgages over the rights over the mining areas. This means the administrative mining contract with the Bolivian government and the exploration licence may not be security themselves. However, Articles 95 and 102 of the Mining and Metallurgy Law provide that title holders have ownership over their investment, the mining pro - duction, movable and immovable property built on the land, and the equipment and machinery installed inside and outside of the perimeter of the mining area. As a result, mining operators may grant such property (ie, mining production, equipment and machinery) as collateral and security for any financing. In addition, there is no limitation on pledging as security the entirety of the shares that the inves - tor may hold in the mining companies, which have been granted and legally hold the mining rights (licences or administrative contracts). 6. Mining: Outlook and Trends 6.1 Two-Year Forecast for the Mining Sector The intention of the current government is for the Bolivian mining sector to expand and grow. In recent years, the Bolivian State has been open to receiving foreign direct investment to carry out sustainable world-class mining exploration and exploitation projects. On the one hand, the Ministry of Mining has rec - ommended that COMIBOL (the Bolivian State mining corporation that holds mining rights over large areas of interest) and other state institu - tions partner with foreign investors who can inject the necessary investment, technology and know-how for the development of new large
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