Glencore begins arbitration against Bolivia over mine nationalization

By Rosalba O'Brien

SANTIAGO, Aug 12 (Reuters) - Swiss-based mining and trading firm Glencore (Frankfurt: 8GC.F - news) said it would begin arbitration proceedings against Bolivia over the nationalization of some of its assets by the Evo Morales government.

"Glencore's objective has always been to settle the dispute with the government of Bolivia amicably," the company said in an emailed statement on Friday.

"However, after almost nine years of negotiations without receiving any compensation for the nationalization of three of its operations, Glencore had no other option but to initiate arbitration proceedings to enforce its rights under international law."

Leftist Morales, an ex-coca grower who took power in the impoverished Andean country in 2006, has made nationalizing Bolivia's resources industries a key plank of his policies. The government says it welcomes investors but retains sovereign control of projects.

The Glencore case relates to the 2007 and 2010 nationalizations of two smelters, as well as a small tin and zinc mine, which the government took back into its own hands in 2012 after a violent dispute between employees and independent miners.

Bolivian state attorneys defended the actions of the Morales' administration, saying in a statement that the original privatization by a previous government had not been handled properly and that nationalization had been "in the public interest and for social benefit".

The attorney general said it would defend the state and was due to present a reply to the notice of arbitration by Aug. 18. (Reporting by Rosalba O'Brien; Editing by Sandra Maler)