Announcement of Six Million Twenty Thousand US Dollars Credit to Bolivia for a Mining Credit Project on January 17, 1974

,:·· I ,. • INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET. N.W., WASHINGTON 0. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 74/4 Subject: $6. 2 million credit to January 17, 1974 Bolivia for a m~ning credit project. The International Development Association (IDA), an affiliate of the World Bank, announced today a $6.2 million credit to Bolivia to help finance a credit program for the development and expansion of private medium-size mh.an, a national survey of small mines and a technical assist- ance program for the mining sector. This is the first time the Bank Group is supporting a credit program for the mining sector • • The mining sector generates a substantial portion of Bolivia's foreign exchange earnings. The Bank Group decision to assist this sector arose from a comprehensive study of mining in Bolivia which was reviewed with the Bolivian Government in late 1972. The credit program, to be administered by Banco Industrial S.A. (BISA), will help to finance about 25 mining subproj€cts. BISA borrowers will come from a group of about 40 medium-size, mostly Bolivian-owned, mining enter- prises. The sub-projects will include underground mine development and mod- ernization, construction and modernization of beneficiation plants, electri- fication and installation of camp infrastrJcture and surface mine development. The credit program will increase Bolivian exports of antimony, tin, tungsten, and other minerals resulting i,n additional annual net export earnings of • about $7 million •  The credit will also support a national survey of small mines to identify and prepare small mines for development assistance. The survey will be conducted by the Geological Service of Bolivia (GEOBOL), with • external technical assistance. The Ministry of Mining and Metallurgy is the coordinating agency for the mining sector. The IDA credit will also help to finance a tech- nical assistance program with the objective of strengthening the Ministry. Included in the technical assistance component is a study of the structure of taxation of the mining sector in Bolivia and preparatory work for a proposed mi.ning exploration fund. The IDA credit is being made to the Republic of Bolivia for a tenn of 50 years including 10 years of grace. It will be interest free but a service charge of 3/4 of 1 percent will be made to cover IDA's administrative expenses. Out of the $6.2 million credit, the Government will pass on $5 million to BISA at an interest rate of no less than 7-1/4 percent. In turn, BISA will lend to its borrowers in foreign exchange, at an interest rate of • no less than 11-1/4 percent, for a period of not more than 15 years, includ- ing a period of grace not expected to exceed three years. The Government will make available the remaining $1.2 million to GEOBOL and the Ministry of Mines and Metallurgy. • ' i (' • TECHNICAL DATA PROJECT: Mining Credit COUNTRY: Bolivia TOTAL COST: $9.27 million IDA FINANCING: $6.20 million; 50 years; 10-year grace period; 3/4 of li. service charge to cover IDA's adminis- trative expenses. OTHER FINANCING: BISA $0.77 million, BISA subborrowers $1.93 million, and the Government $0.37 million. IMPLEMENTING ORGANIZATIONS: Banco Industrial S.A. (BISA) • Casilla 1290, La Paz, Bolivia; Cable Address: BISA, La Paz, Bolivia Servicio Geologico de Volivia (GEOBOL) Federico Zuazo 1673 La Paz, Bolivia Cable Address: GEOBOL, La Paz, Bolivia Ministry of Mining and Metallurgy La Paz, Bolivia Cable Address: MINMINERIA, La Paz Ii Bolivia PROJECT DESCRIPTION: Credit Program for the development and expansion of private medium-size mines, a National Survey of Small Mines and a Technical Assistance Program to the Min- ing sector. PROCUREMENT: Equipment for the Credit Program would be purchased from foreign sources as off-the-shelf items mostly costing less than US$50, 000. Except for diamond drill:i and accessories valued at about US$240,000 which would be subject to inter- national competitive bidding, equipment for the Survey would be procured on an intemational basiu by requesting quotatii,ns from at least three foreign countries. Advisory services required under the Survey and the Technical Assistance Program • would be obtained on the basis of intemational recruitment • ESTIMATED COMPLETION DATE: End of 1976