The Bolivian government have revoked their previous acceptance of a Canadian company's plans to mine a rich silver deposit in the southwestern Potosi province.
Bolivia has seized and nationalised the assets of Vancouver-based South American Silver Corp and have accused them of causing violent conflict within the community of the Malku Khota project.
Bolivian President Evo Morales told the official state information agency:
“These natural resources are of the state and as such the Bolivian people".
The move came after a week of bubbling violence around the project that saw one man killed as well as Quechua Indian opponents in local communities taking seven hostages, including employees of the company and a local policeman.
Prior to the announcement the community released two mining engineers over the weekend after holding them hostage for 10 days.
This development is the latest in a trend of moves by the government headed by Morales. In June of this year the government nationalised the Colquiri mine owned by Glencore International PLC for similar reasons to those seen in the past week.
Morales is the first indiginous president of Bolivia, and one of landmark moves was to nationalise Bolivia’s key natural gas industry almost as soon as he came to power in 2006.