Board Resolution No. 069/2015

BOARD RESOLUTION NO. 069/2015
SUBJECT: MONETARY OPERATIONS MANAGEMENT — APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO THE BOLIVIAN MINING CORPORATION (COMIBOL) FOR Bs4,301,190,050.-

SEEN:
The Political Constitution of the State promulgated on February 7, 2009.
Law No. 1670 of the Central Bank of Bolivia (BCB) of October 31, 1995.
The Law of October 29, 1956.
Law No. 211 of the General State Budget — Management 2012 (GBE-2012) of December 23, 2011.
Law No. 396 of Modifications to the General State Budget — Management 2013 (GBE-2013) of August 26, 2013.
Law No. 614 of the General State Budget — Management 2015 (GBE-2015) of December 13, 2014.
Ministerial Resolution of the Ministry of Economy and Public Finance (MEFP) No. 028 of January 21, 2015.
Ministerial Resolutions of the Ministry of Mining and Metallurgy (MMM) No. 77 and No. 121/2015 of March 20 and April 22, 2015, respectively.
Board Resolution of the BCB No. 023/11 of February 22, 2011, which approves the Regulations for the granting of credits to National Strategic Public Enterprises within the framework of the General State Budget — Management 2010 and 2011; modified through B.D. No. 026/11, No. 027/11, No. 030/11, No. 097/11, No. 039/12, No. 064/12, No. 024/13, No. 144/13, No. 008/14, No. 040/14 and No. 039/15 of dates March 2, March 18, March 22 and August 9, 2011, March 23, May 29, 2012, March 12 and October 15, 2013, January 28 and April 29, 2014 and March 17, 2015, respectively. Board Resolutions of COMIBOL No. 5926 and No. 5948/2015 of January 27 and April 9, 2015, respectively. COMIBOL notes CITE: GERE: 118, 119 and 120/2015, all dated February 27, 2015. COMIBOL notes CITE: GERE: 124, 190, 202, 208 and 0276/2015, dated March 9, 20, 30 and 31, and April 29, 2015, respectively. The Report of the Monetary Operations Management (GOM) CITE: BCB-GOM-SOSP-DCE-INF-2015-13 of March 27, 2015. The Reports of the Legal Affairs Management (GAL) CITE: BCB-GAL-SANO-INF-2015-134 and 185 of March 27 and May 4, 2015, respectively.

CONSIDERING:
That the Political Constitution of the State (CPE), approved by Referendum on January 25, 2009 and promulgated on February 7, 2009, in item 6 of Article 9, establishes that it is the goal and foundation of the State to promote and guarantee the responsible and planned use of natural resources, and to boost their industrialization, through development and strengthening of the productive base in its different dimensions and levels. Likewise, in item 10 of paragraph I of Article 158 and Article 322, it establishes that the Plurinational Legislative Assembly has the attribute to approve the contracting of public debt.

That Article 322 of the Political Constitution of the State provides that the Plurinational Legislative Assembly will authorize the contracting of public debt when the capacity to generate income to cover capital and interest is demonstrated, and the most advantageous conditions in rates, terms, amounts and other circumstances are technically justified. Public debt will not include obligations that have not been expressly authorized and guaranteed by the Plurinational Legislative Assembly.

That the Law of October 29, 1956 elevates to the rank of Law Supreme Decree (D.S.) No. 3196 of October 2, 1952, which creates an autonomous entity with legal personality called Corporacion Minera de Bolivia.

That Law No. 211, in its Article 33, authorizes the BCB to grant an extraordinary credit of up to Bs5,332,050,000.- (Five Billion Three Hundred Thirty-Two Million Fifty Thousand 00/100 Bolivianos) in favor of COMIBOL, on concessional conditions, with the object that its National Management of Evaporitic Resources invests in the production and industrialization of lithium carbonate, potassium chloride, and other products of the evaporitic chain, either as direct investment or capital contribution through an association with companies that contribute technology, for the manufacture of cathode materials, electrolytes and lithium-ion batteries. For this effect, the BCB is exempted from the application of Articles 22 and 23 of Law No. 1670 of October 31, 1995.

That within the framework of Paragraph I of the mentioned Article and according to what is established in Item 10, Paragraph I of Article 158 and Article 322 of the CPE, COMIBOL is authorized to contract the aforementioned credit with the BCB.

That according to item III, the MMM must justify before the BCB that the use and destination of the resources of the credit to be acquired by COMIBOL are of national priority within the framework of the National Development Plan and that future cash flows will be used for the payment of the credit.

That according to item IV, it corresponds to the MMM to evaluate and monitor the resources of the credit to be granted by the BCB in favor of COMIBOL.

That within the framework of paragraph V, the MEFP is authorized, through the General Treasury of the Nation (TGN), to issue and grant Non-Negotiable Treasury Bonds in favor of the BCB, to guarantee the amount of the credit granted by said entity in favor of COMIBOL at the written request of the lead sector Ministry and jointly with the BCB.

That Law No. 396, in its article 9, modifies article 33 of Law No. 211 of December 23, 2011, modifying paragraph I (object of the credit) and adding a paragraph (IV) that determines that COMIBOL is responsible for the use and destination of the resources to be disbursed by the BCB, within the framework of Paragraph I of the article.

That Law No. 614 establishes that any authorization established by Law of the General State Budget, for the BCB to grant extraordinary credits, as well as authorizations to the Ministry of Economy and Public Finance, to issue and grant Non-Negotiable Treasury Bonds through the TGN as backing for the referred extraordinary credits, will not require any other legal authorization for their compliance, understanding that they remain in force until the complete execution of the credit.

That the M.R. of the MEFP No. 028 determines for the 2015 management, a value of at least 20%, as the degree of concessionality for Public Enterprises that access extraordinary internal credits of the Central Bank of Bolivia.

That the M.R. of the MMM No. 77/2015 justifies before the BCB and resolves among others: 1) Approve the B.D. of COMIBOL No. 5926/2015 of January 27, 2015 referred to the project "Integral Development of the Salar de Uyuni Brine — Industrial Plant Phase II", Resolution that also approves the second financing of the Project for Bs4,301,190,050.- (Four Billion Three Hundred One Million One Hundred Ninety Thousand Fifty 00/100 Bolivianos). 2) Declare, that the use and destination of the resources of the credit of the project "Integral Development of the Salar de Uyuni Brine — Industrial Plant Phase II" are of national priority within the framework of the National Development Plan (PND), the Medium and Long Term Planning Guidelines towards the Patriotic Agenda 2025 and Law 535 of Mining and Metallurgy, in the following terms: term 30 Months; Grace 5 Months to capital, and interest; interest rate of 1.39% and annual payment form, from December 2020. 3) Dispose that the cash flows proposed in the project, will be used for the payment of the credit of the project. 4) Confirm based on the conclusions of Technical Report No. 068-DDP 022/2015 of February 13, 2015, issued by the Vice Ministry of Mining and Metallurgical Productive Development, the technical feasibility of the Project. 5) Determine that the Financial Economic Evaluation of the Project, as established in Technical Report No. 068-DDP 022/2015 of February 13, 2015, issued by the Vice Ministry of Mining and Metallurgical Productive Development, justifies and guarantees the payment capacity in the terms of modification established in point first. 6) Instruct that the technical evaluation in accordance with the BCB Regulations, will be executed through the Vice Ministry of Mining and Metallurgical Productive Development and the monitoring of the execution of the credit resources, through the Vice Ministry of Mining Policy, Inspection and Regulation, General Directorate of Administrative Affairs and General Directorate of Planning of the Ministry of Mining and Metallurgy, within the framework of their competencies.

That the M.R. of the MMM No. 121/2015 resolves: 1) Approve the B.D. of COMIBOL No. 5948/2015 of April 9, 2015 with the new Credit Conditions for the second phase of the Project "Integral Development of the Salar de Uyuni Brine — Industrial Plant Phase II". 2) Ratify the M.R. No. 77/2015 of March 20, 2015, except for the second article as a consequence of its modification to the Interest Rate.

That the Regulations for the Granting of Credits to National Strategic Public Enterprises within the framework of the General State Budget Management 2010 and 2011, approved through Board Resolution of the BCB No. 023/11 and modified through Board Resolutions No. 026/11, No. 027/11, No. 030/11, No. 097/11, No. 039/12, No. 064/12, No. 024/13, No. 144/13, No. 008/14, No. 040/14 and No. 039/15, has the object of regulating the granting of credits by the BCB in favor of the EPNE.

That through B.D. No. 5926/2015, the Board of Directors of COMIBOL approves the updated Feasibility Study of the Project "Integral Development of the Salar de Uyuni Brine — Industrial Plant Phase II" (Production), Investment Plan, Disbursement Schedule and Second Financing for the amount of Bs4,301,190,050.-

That through B.D. No. 5948/2015, the Board of Directors of COMIBOL approves the credit conditions for the second phase of the Project "Integral Development of the Salar de Uyuni Brine — Industrial Plant Phase II" (Production).

That through notes CITE: GERE: 118, 119 and 120/2015, COMIBOL informs the Ministry of Mining and Metallurgy, Ministry of Development Planning and Ministry of Economy and Public Finance, respectively, of a copy of the General Board Resolution of COMIBOL No. 5926 dated January 27, 2015 of the project "Integral Development of the Salar de Uyuni Brine — Industrial Plant — Phase II".

That through note CITE: GERE: 124/2015, COMIBOL requests from the BCB a credit destined to Phase II of the project "Integral Development of the Salar de Uyuni Brine — Industrial Plant — Phase II", proposing financial conditions and attaching the documentation required by the BCB.

That through note CITE: GERE: 190/2015, COMIBOL remedies the observations made to the credit request, modifying the legal framework that supports the request and attaching the M.R. No. 77/2015 of March 20, 2015.

That through note CITE: GERE: 202/2015, COMIBOL requests an Interest Rate of 1%, modifying the initially proposed 1.39%.

That through note CITE: GERE: 208/2015, COMIBOL expresses conformity with the conditions approved by the Board of the BCB and requests that the disbursement deadline be established as December 28, 2018.

That through note CITE: GERE: 0276/2015, COMIBOL sends to the BCB the M.R. No. 121/2015 of April 22, 2015 and the General Board Resolution of COMIBOL No. 5948/2015 of April 9, 2015.

That the Monetary Operations Management recommends in its report CITE: BCB-GOM-SOSP-DCE-INF-2015-13, consider the interest rate scenarios proposed for the approval of the financial conditions of the credit requested by COMIBOL and in case the request is considered favorable, COMIBOL must open the corresponding disbursement and payment accounts at the BCB through the MEFP.

That the Legal Affairs Management concludes in its report CITE: BCB-GAL-SANO-INF-2015-134 that the request made by COMIBOL falls within what is provided for by current regulations, to this effect it has complied with the presentation of the documents required in article 2 of the Regulations for the Approval of Credit to National Strategic Public Enterprises in the Framework of the General State Budget — Management 2010, 2011, 2012, 2013, 2014 and 2015 and recommends putting the credit request presented by COMIBOL before the Board for consideration.

That the Legal Affairs Management concludes in its report CITE: BCB-GAL-SANO-INF-2015-185, that COMIBOL's request falls within what is provided for by current regulations and that COMIBOL has ratified its request of 1.00% annual interest rate and the disbursement deadline to December 28, 2018, with the presentation of Administrative Resolution No. 5948/2015, which was approved through Ministerial Resolution No. 121/2015. Since COMIBOL has complied with the presentation of the documents required in article 2 of the Regulations for the Approval of Credit to National Strategic Public Enterprises in the Framework of the General State Budget — Management 2010, 2011, 2012, 2013, 2014 and 2015, it corresponds to the Board of Directors of the BCB to consider the referred credit request, by two-thirds of the votes of the members present in the meeting as provided in article 6 of the cited Regulations.

That Article 6 of the Regulations for the Approval of Credit to National Strategic Public Enterprises in the Framework of the GBE — Management 2010, 2011, 2012, 2013, 2014 and 2015 establishes that the Board of Directors of the BCB, considering the technical and legal reports, will consider the credit request and in its case approve it, through the favorable vote of two-thirds of its members present in the Board meeting, issuing the corresponding Resolution; and instruct the elaboration and subsequent signing of the contract by the President of the BCB, prior to review and approval by the Board.

THEREFORE,
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Approve within the framework of what is provided in Article 33 of Law No. 211 of December 23, 2011 of the General State Budget — Management 2012 (GBE — 2012), of Article 9 of Law No. 396 of August 26, 2013 of Modifications to the General State Budget — Management 2013 (GBE — 2013), of Article 12 of Law No. 614 of December 13, 2014 of General State Budget — Management 2015 (GBE — 2015), of the antecedents and provisions described above, the granting of a concessional extraordinary credit in favor of COMIBOL under the following terms and conditions:

Currency: Bolivianos.
Total Credit Amount: Bs4,301,190,050.- (Four Billion Three Hundred One Million One Hundred Ninety Thousand Fifty 00/100 Bolivianos).
Term: 30 years from the first disbursement.
Grace Period: To principal and interest 5 years with payment of accumulated interest from the sixth year.
Interest Rate: 1.00% (one percent).
Disbursement Deadline: December 28, 2018.
Payment Plan: Annual.
Guarantees: Non-Negotiable Treasury Bonds.

La Paz, May 5, 2015

Rocelo Zas Estrada
Reynaldo Yujra Segale
Rafael Perez Alandia
Carlos Rivero
Sergio Velarde Vera

Article 2.- Authorize the President of the BCB to sign the contract with the Corporacion Minera de Bolivia (COMIBOL) under the terms of this Resolution, document approved in the session of the date.

Article 3.- The Presidency and the General Management are in charge of the execution and compliance of this Resolution.