Announcement of Bolivia is First Country to Receive IDA Support for Mineral Exploration Fund on June 28, 1979

FOR . IMMEDIATE .REtEASE . ·· ·:. World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 79/104 June 28, 1979 BOLIVIA IS FIRST COUNTRY TO RECEIVE IDA SUPPORT FOR MINERAL EXPLORATION FUND The International Development Association (IDA), the World Bank's affiliate for concessionary lending, today announced approval of a $7.5 million credit to provide financial, technical, and management support to the National Mineral Exploration Fund of Bolivia. This fund is the first of its kind to be supported by the World Bank. The National Mineral Exploration Fund was established in April 1977 to foster mineral exploration in Bolivia and thus facilitate the expansion of mineral production and exports. The project will enable the fund to develop into a sound institution. Bolivia depends on mineral production, primarily tin, for about 70% of its foreign exchange earnings and 20% of its fiscal revenues. The country also produces wolfram, zinc, silver, lead, copper, gold, bismuth, and antimony • • The continuing development of Bolivia's mineral potential, however, poses serious challenges. Bolivia's ore deposits are mostly confined to high altitude, mountainous areas, into which access is difficult. Mineralization normally occurs in narrow veins embedded in hard rock, making extensive tunneling necessary. Deposits are usually low grade and consist of complex ores which are difficult to treat. Although geological data indicate substantial reserves, during the last eight years mining production and the value of mineral exports in constant dollars have barely risen. This is largely due to the depletion of proven ore reserves in existing mines and the lack of development of new reserves because of insufficient investment in exploration. The fund will initially concentrate on financing exploration projects for privately owned small- and medium-sized mining enterprises, which account for about 36% of the country's mineral production. The fund will also provide financing to the Bolivian Mining Corporation (COMIBOL), the state mining company, which accounts for 64% of Bolivia's mineral exports. The National Mineral Exploration Fund Project is part of the Bolivian government's efforts, assisted by the World Bank since 1974, to increase the exploitation of the mineral resources of the country. The project wi 11 assist the fund's operations program for the period 1979-82 estimated to cost about $ 16. 5 mi 11 i on • ... • 'I NOTE: Money figures are expressed in U.S. dollar equivalents.  - 2 - The project includes the purchase of equipment and materials, and the provision of technical assistance required to strengthen the operational capabilities of the fund. The project will also finance consultant and ••. contractor services for mine exploration, equipment, and technical assistance. The project is expected to finance general survey works for about 40 mining projects, about 25 preliminary sampling and studies, about 8 detailed reserve evaluation works, and about 5 feasibility studies. Additional financing for the project will be provided by the govern- ment ($4.8 million); and bi lateral grants from the Bureau de Recherches Geologiques et Minieres of France ($0.5 million) and from the Gesellschaft fUr Technische Zusammenarbeit of Germany ($3.8 million). The $7.5 million credit to the Republic of Bolivia is for 50 years, including a 10-year grace period. It carries no interest, but bears a service charge of 3/4 of 1% a year to cover administrative costs. The World Bank Group has previously approved three lending operations amounting to $28.2 mill ion to support the mining sector in Bolivia. • - 0 - •  FORM NO. 1121 (5-76) T ECHN I CAL DA T A .j •• l PROJECT: COUNTRY: National Mineral Exploration Fund Bo 1 iv i a $ 16 • 5 mi 11 i on TOTAL COST: I DA FI NANC I NG : $7.5 million on standard IDA terms OTHER FINANCING: Government of Bolivia, $4.3 million; Gesellschaft fuer Technische Zusammenarbeit (Germany), $3.8 million; Bureau de Recherches Geologiques et Minieres (France), $0.5 million; Central Bank loan, $0.4 million. IMPLEMENTING ORGANIZATION: Fonda Nacional de Exploracion Minera (FNEM) Cordero 257 La Paz, Bolivia CABLE: MINMINERIA TELEX: BX5564 PROJECT DESCRIPTION: It consists of technical assistance to the fund and of the fund's 1979-82 exploration program including purchases of equipment which assumes: a) Stage A (general survey) work for about 40 projects per year; and b) Stage B (preliminary sampling and studios) work for • about 25 projects of which 14 have successfully completed Stage A, and 11 are to be identified out of the work to be carried out under (a) above; Stage C (detailed reserve evaluation) work for about 8 projects; and Stage D (feasibility study) work for about 5 projects. PROCU.REMENT: All procurement will be in agreement with IDA procurement guidelines. Goods under contracts estimated to cost less than $250,000 each may be procured on the basis of quotations from at least three suppliers, except contracts for rail, water pipes, and air pipes which woulc be procured in all cases under international competitive bidding. IDA will approve the award of all contracts. CONSULTANTS: Up to a total of 100 man-months in consultant and expert services for specific short-term assignments will be contracted under the project • • ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 18-25% 1983 - 0 -