Bolivia backs off mines takeover

A miners' dispute prompted nationalisation plans

Bolivian President Evo Morales has backtracked on plans to nationalise his country's mining industry, saying the government cannot currently afford it.

But he said the industry - which ranks second after gas in its league table of exports - would eventually return to state control.

Earlier, the government signed deals with energy firms to allow them to continue operating in Bolivia.

Bolivia expects to earn about 70% of income from the energy sector.

Foreign operators, including Petrobras and Total, would get 30%, said energy minister Carlos Villegas.

Minerals worth $483m - mainly zinc, silver, gold, and tin were exported in the first half of 2006 - the Bolivian Institute of Foreign Commerce said.

Proposals to nationalise the mining industry were put forward after 16 people died during a clash in October between miners over who had the right to run Huanuni tin mine.

Now the nationalisation would be replaced with a "reactivation" of the industry aimed at generating jobs and investment, officials say.