strange reference to rau

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    The power of the internet search! The article below was published in the Wall Street Journal on 8 August. It has a very strange reference to RAU being "on the verge of loosing a gold mine". Does RAU own more than one gold mine in Bolivia? If not then what is this quote all about and why hasn't it been mentioned to the market? The reference to RAU is about 3/4 the way down.

    Texan Sees Gold in Bolivia

    William Petty Backs Indigenous Mining Deals in Bold Bid


    LA PAZ, Bolivia

    Bolivia's left-wing government has boosted state control over key parts of the economy, tried to nationalize several private mining ventures and may raise taxes on the mining sector later this year, amid social unrest.
    But that isn't scaring away one Texan, who is carrying out a business plan with the potential to remake Bolivia's stagnant mining sector.
    William Petty, chief executive of Franklin Mining Inc., says he can bypass government hostility to private enterprise by striking direct deals with indigenous mining cooperatives, whose control over rich mineral reserves is enshrined in Bolivia's new socialist constitution.
    "We are making history. This will be a model not only for Bolivia, but for the entire world," Mr. Petty told representatives of mining cooperatives at a signing ceremony in April when Mr. Petty and the co-op miners formed a joint venture to develop the La Joya gold mine on the Andean high plain.
    Under the terms of the deal, Franklin Mining, which is based in San Antonio, will invest $8 million to build a plant that would process about 20,000 ounces of gold a month. The miners and Franklin Mining would split the earnings evenly. With gold prices at current levels, Mr. Petty expects profit margins of as much as 70%.
    Bolivia's Evo Morales, an Aymara Indian and the head of a coca-leaf growers' union who became president in 2006, is widely regarded as the country's first fully indigenous president. The populist has aligned himself with Venezuelan President Hugo Chavez and mimicked Mr. Chavez's move to boost the state's role in the energy industry.
    This year, Bolivia's government pushed the idea of renegotiating contracts with mining companies and giving the state mining enterprise Comibol a controlling role in joint ventures. But the government dropped the plan amid opposition from some mining cooperatives and union groups.
    Bolivia produced 6% of the world's total mineral output in 2009 and companies like Idaho-based Coeur D'Alene Mines Corp. and Switzerland's Glencore International PLC are among the Bolivia's biggest foreign investors. But the country still lags behind larger regional producers like Peru and Chile in output and foreign investment partly because of uncertainty over the government's intentions.
    About 80% of mine workers in Bolivia belong to a cooperativista, or mining co-op. They were formed in the 1980s, when a plunge in world commodity prices caused state and private investment in the sector to dry up. The co-op miners became key supporters of Mr. Morales, who promised desperately needed investment and technology to improve their generally crude or semimechanized methods.
    Despite his election promises, Mr. Morales has tended to neglect mining interest, cooperativistas say. Recently, miners blocked a government move to nationalize two major foreign-owned mines on the grounds that the state didn't have the backing of mining unions, nor did it possess the financial resources to administer the mines.
    "The government lacks a strategy to reactivate the mining sector" said Albino Garcia, the national leader of the cooperativistas. Government leaders, including Minister of Mines Jose Pimentel, have denied this accusation.
    As a result of the tension, many co-op miners are turning to the private sector. In drawing up the new constitution in 2008, the government gave indigenous communities who live in mineral-rich areas and not the state alone a big say in managing the resources.
    Article 351 of the constitution permits individual communities and cooperatives to "contract private companies and constitute mixed companies" for ventures.
    "The new constitution empowers us as owners of the property to enter into deals with whomever we choose," says Carlos Castro, secretary general of the Cooperative Mining Federation of Oruro, which controls La Joya. "We are looking to improve the quality of production of our mines."
    The new constitution is the best legal protection against nationalization, says Mr. Petty, noting that "under laws of the new constitution, cooperativistas have the upper hand in the mining industry."
    Mining experts in Bolivia say Mr. Petty may be right. "There is a big vacuum here," said Jose Padilla, the head of mining and hydrocarbons for the regional government of Santa Cruz, Bolivia's most economically important and prosperous region.
    Some companies have had difficulty dealing with the cooperativistas and believe they can't be trusted. Victor Barua, managing director in Bolivia of Australia's Republic Gold Ltd., says his company is on the verge of losing a gold mine over a dispute with community miners.
    "It's Catch-22," Mr. Barua says. "The cooperativistas want an easy way to improve their operations through investment and capital. And when the time comes for them to perform, they don't deliver and kick you out....They are unregulated and the government won't step in, so you are running a risk."
    Yet Mr. Petty seems unconcerned. "Until now, the cooperativistas have always kept their word because we've kept ours," he said, noting the relationship with the cooperativistas has been the best relationship his company has formed in South America.
    Mr. Petty, a 58-year-old who splits his time between Texas and Bolivia, gives speeches at town squares and plays up Cherokee ancestry to gain acceptance with Andean Indians.
    La Joya's miners say they are impressed by his previous investment record at the small zinc mine of La Escala, where he improved roads and helped build clinics and schools.
    Speaking to the cooperativistas of La Joya in his thick Texas accent, Mr. Petty pledged to transform their mud-brick village at the base of a mountain containing 13 million ounces of gold and silver into a thriving modern community.
    Mr. Petty has been trying to reconcile the claims of two rival communities on La Joya, holding marathon sessions at his office in La Paz. He says the problem is "90% resolved."
    "Petty has shown that he has the temperament and patience to gain the trust of the cooperativistas," says Joaquin Dabdoub, a mineral trader and former Bolivian ambassador to Japan. "The only question is whether he can deliver on his promises."
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