Morales

RIO DE JANEIRO, (Reuters):

Bolivia's government will move ahead with plans to nationalise the mining industry, President Evo Morales said yesterday, in the latest move by a left-leaning Latin American nation toward more state control of key sectors.

Morales, speaking to reporters at a summit of presidents of the Mercosur trade bloc in the Brazilian city of Rio de Janeiro, said however it would not be a full nationalisation. His government was still studying the details, he added.

"We are discussing some deep reforms that will allow investors to recover their investments, but they are also going to have to make an economic contribution to the state," Morales said. "I've said it before, we need partners not masters."

Morales nationalised Bolivia's energy industry in May 2006 shortly after taking office as president of South America's poorest country.

Chavez motives

His latest move follows an announcement by Morale's chief ally, Venezuelan President Hugo Chavez last week that his government would take over telecommunications and energy companies. Investors are concerned that Chavez also has his eyes on Venezuela's mining sector.

The developments are signs of a more radical left wing in Latin America, led by Chavez, which has alarmed Washington. Morales outlined his mining plans at a summit of South American leaders aimed at increasing regional unity, but marked by differing visions of the region's path to development.

Bolivia, which has the second biggest natural gas reserves in South America, has significant deposits of tin, zinc, lead, silver and gold. It also has the El Mutun iron-ore deposit, believed to contain one of the world's biggest reserves of the raw material for steel.

Morales declined to mention any other possible sectors that might be targets for state intervention, and he gave no further details on the mining plans.