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Cablegate: Glencore Opposes Smelter Nationalization

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DE RUEHLP #0410 0461115
ZNR UUUUU ZZH
R 151115Z FEB 07
FM AMEMBASSY LA PAZ
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INFO RUEHAC/AMEMBASSY ASUNCION 6541
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RUEHC/DEPT OF LABOR WASHINGTON DC
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UNCLAS LA PAZ 000410

SIPDIS

SIPDIS

STATE FOR WHA/AND LPETRONI
COMMERCE FOR JANGLIN
TREASURY FOR SGOOCH

E.O. 12958: N/A
TAGS: EMIN EINV ECON PREL PGOV BL SZ
SUBJECT: GLENCORE OPPOSES SMELTER NATIONALIZATION

REF: LA PAZ 384

1. (U) In a February 13 statement issued from its Baar,
Switzerland headquarters, Glencore International said it
"firmly opposed" the GOB's February 9 nationalization of its
Vinto tin smelter (reftel) and "reserved its right...to take
all necessary action to protect its interests in accordance
with Bolivian and international law, including its right to
seek international arbitration" under Switzerland's
Investment Promotion and Protection Treaty with Bolivia,
which prohibits expropriation unless "effective and adequate"
compensation is promptly paid.

2. (SBU) Swiss representative Eros Robiani told Econoff
February 14 that he expected Glencore to try to establish
dialogue with the GOB, probably with assistance from the
Swiss embassy. He noted that if the company ultimately
sought international arbitration, it would "do so not for the
money, but to make a point," as the Vinto smelter represented
only a small portion of the mining giant's global revenues.
Robiani speculated that Glencore's decision to act was more
"a matter of pride" than anything else.

3. (SBU) Comment: Glencore may have a difficult time engaging
the GOB, as officials continue to declare the government's
intent to refuse to provide compensation. Glencore's
statement provoked little official reaction, with Minister of
Mining Jose Dalence saying only that the GOB "had rights as a
state" and would carefully respond to any measure seeking
compensation for the smelter's nationalization. End comment.
GOLDBERG

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