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1/5/15

Junior mining investment opportunities in Bolivia

From IKN295, out last night. Part of the regular quarterly regional review of LatAm countries and stuck on the blog this morning because the quicker this Calandra bullshit is nipped in the bud, the better.

Here comes a necessary word or three about Bolivia. There’s a bit of a pump starting on Bolivia and its mining potential for Vancouver-type junior explorecos, which seems to be based around the move made by the arch-scamster John Lee and his Prophecy (PCY) company, that’s just bought ex-Orvana properties in Bolivia. Lee’s being assisted in his pump by another scumbag, Thom Calandra. Alongside the direct promo on his company, Bolivia is now getting touted as a place that will welcome FDI for at least some of the same reasons Ecuador is being promo’d, with all that about the dump in hydrocarbon prices meaning these States are now newly desperate for foreign capitals and will welcome northern capital with newly open arms, do anything for us tall paleskinned people, etc etc. It’s total bullshit and I can’t stress that too highly. Bolivia will accept FDI on its terms, but as things stand and as things will stand while Evo Morales is in power (let’s call that indefinite for our purposes today), those terms are nobody’s idea of good. As things stand today Bolivia is in good shape, it’s just posted 5.5% GDP growth in 2014 (8) (the best in all South America last year) and despite the drop in gas prices its Finance Minister expects 5.9% growth in 2015. Quite right too, because the North seems to forget that Bolivia sells its gas on long term contracts to Brazil and Argentina that are less affected by the moves in spot market prices; its revenues may change from year to year but it’s not boom/bust, either. We should also note that Bolivia’s international reserves are now at 50% of annual GDP, the highest percentage level in Latin America. Be clear; this country is not desperate for your dollars. In fact if things go unexpectedly badly for Bolivia’s economy in 2015, or things don’t pick up and 2016 or 2017 start looking soft, it’s manifold times more likely that the country nationalizes its mining industry than opens it up to neoliberal type investment opportunities. Companies at the scam end of the junior mining world such as PCY will be able to spin out their hoodwinking games on properties there, but please don’t take these people seriously.
 Bolivia has been an impressive economic success story in the last ten years. But it’s done that by ignoring the orthodox western model, by wholly rejecting it, by nationalizing and spending the cash in classic left-wing social program ways. Perhaps it’s a special case, perhaps not, the debates on the philosophy behind its success and whether it’s sustainable are for other places but if you think it’s about to change the model you need to change the books you’re reading. The country is and will remain Socialist with a capital S and not the place for the most cutting edge of capitalist money, that which funds junior mining exploration companies. End.