THE NEW BOLIVIAN MINING CODE

Abstract

As of 1952, and well into the 80's, the Bolivian mining industry's main characteristic was its ownership, the State; which played a protectionist and leading role in pro­ duction. Under this model, all regulations related to mining property were focused to guarantee a fast, easy access by Corporaci Un Minera de Bolivia, COMIBOL (Bolivian Mining State Corporation) to the lands mineral resources, thus giving the Corporation a limitless operational frame, and allowing it to perform its main objective as the main source of mining production. Juridical security of private mining ownership, was indeed a secondary objective. Large mineralised areas of the Bolivian land, were assigned to COMIBOL by the State; all these land allo­ cations had a 5 km security border zone (approximately 8.06 miles) within which, private rights to ownership were banned. Juridical regulations on Fiscal reserves were created parallel to the Mining Code which was current at the time, and which covered more than 70% of the total mineralized areas of the country, thus, private access to such territories were only available through concessional rights through concession-contract and leasing agreements — for limited periods of time. Un­ der such conditions, Bolivia marched into the 1980s with a negative growth rate, based on low investments — especially, in exploration — a growing technological delay, intensive use of labor, insufficient management capacity, a limited access to finance, and in general, very low; which was covered at that time by high mineral and metal prices in the international market. The fall of metal and mineral prices in the International Market, which took place at the end of 1985, triggered the fall of the State protectionist model, and the virtual bankruptcy of the Bolivian Mining Corporation which came to an accumulated deficit of about 700 million dollars (1980-1985), not withstanding the losses of the state smelting plant which had reached over 300 million during the same period. Mining exports started to be severely undermined with its logical negative impact on tax revenues, which in turn undermined the economies of the metal and mineral producing areas; this led to the consequent loss of legitimacy of Mining vis-vis the civil population. Facing exhaustion and unfeasibility, the States protectionist model, had to be reformed. The need of a profound structural reform in the Bolivian mining sector required the