Resolution 052/2011

BOARD RESOLUTION NO. 052/2011 SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES APPLICATION FOR CONCESSIONAL EXTRAORDINARY CREDIT IN FAVOR OF THE BOLIVIAN MINING CORPORATION (COMIBOL), FOR AN AMOUNT OF Bs801,050,000.-.

VIEWED: The Political Constitution of the State (CPE) promulgated on February 7, 2009. Law No. 1670 of the Central Bank of Bolivia (BCB) of October 31, 1995. Law No. 2042 on Budgetary Administration of December 21, 1999. The General State Budget for the 2010 management period (PGE-2010). Law No. 50 modifying the PGE – 2010 of October 9, 2010. Law No. 62 approving the General State Budget for the 2011 management period (PGE – 2011) of November 28, 2010. The Law of October 29, 1956. Law No. 3720 of July 31, 2007. Supreme Decree No. 29474 of March 12, 2008. The Regulation for the Granting of Credit to National Strategic Public Enterprises within the framework of the General State Budget for the 2010 and 2011 management periods, approved by Board Resolution of the Central Bank of Bolivia No. 23/2011, of February 22, 2011, and modified by Board Resolutions No. 26/2011, No. 27/2011, and No. 30/2011, of March 2, 18, and 22, 2011, respectively. The GERE Notes: 0432/2011, GERE: 0520/2011, PE-0456/2011, PE-0467/2011, PE-0488/2011, and GERE: 565/2011 from COMIBOL dated March 16, 28, 29, and 31, and April 4, 2011. The Ministerial Resolution of the Ministry of Mining and Metallurgy No. 056 of March 14, 2011. The General Board Resolution of COMIBOL No. 4539/2011 of February 14, 2011.

//2. B.D. No. 052/2011 The General Board Resolution of COMIBOL No. 4583/2011 of March 29, 2011. The General Board Resolution of COMIBOL No. 4587/2011 of March 31, 2011. The General Board Resolution of COMIBOL No. 4589/2011 of April 4, 2011. The General Board Resolution of COMIBOL No. 4615/2011 of May 4, 2011. The GERE Notes: 0359/2011 and GERE: 0360/2011 from COMIBOL both dated March 3, 2011. Act No. 22/2011 corresponding to the Ordinary Meeting of the Board of Directors of the BCB of May 3, 2011. The Note BCB-PRES-CE-2011-415 from the BCB dated May 4, 2011. The Note PRES-CE-2011-419 from the BCB dated May 4, 2011. The Note BCB-PRES-CE-2011-424 and MM-366-DS 0242/2011 from the BCB and the Ministry of Mining and Metallurgy dated May 5, 2011. The GERE Note: 813/2011 from COMIBOL dated May 11, 2011. The Note MEFP/VTCP/DGCP/UEPS-0760/2011 (2175) of May 13, 2011. The Report BCB-APEC-SSMF-INF-2011-010 from the Economic Policy Advisory dated April 12, 2011. The Report BCB-GOM-SOSP-DCE-INF-2011-4 from the Monetary Operations Management dated April 13, 2011. The Report BCB-GAL-SANO-INF-2011-125 from the Legal Affairs Management dated April 13, 2011.

CONSIDERING: That the Political Constitution of the State approved by referendum on January 25, 2009, and promulgated on February 7, 2009, in item 6 of its article 316, establishes that the State's function in the economy is to prioritize the promotion of the industrialization of renewable and non-renewable natural resources, within the framework of respect and protection of the environment, to guarantee the generation of employment and economic and social inputs for the population. Likewise, in item 10 of paragraph I of its article 158 and article 322, it establishes that the Plurinational Legislative Assembly has the attribute to approve the contracting of public debt.

That the PGE-2010 approved within the framework of item 11 paragraph I of article 158 of the CPE, in its article 41, authorizes the BCB to grant an extraordinary credit up to the equivalent of $us1,000,000,000.- (One Billion 00/100 United States Dollars), in favor of National Strategic Public Enterprises (EPNEs) under concessional conditions, with the exclusive objective of financing productive investment projects within the framework of the country's food and energy security; for which effect, the BCB is exempted from the application of articles 22 and 23 of Law No. 1670.

That Law No. 50, in its article 19, determines that within the framework of what is provided in articles 8, 9, and 10 of said Law, COMIBOL is released from the application of articles 33 and 35 of Law No. 2042.

That Law No. 62, in its article 13, determines that within the framework of article 41 of PGE-2010, the BCB is authorized to grant COMIBOL an extraordinary credit of up to Bs836,400,000.-, with the exclusive objective of investing in the production and industrialization of lithium, under concessional conditions; for which the BCB is exempted from the application of articles 22 and 23 of Law No. 1670. Likewise, it determines that, in accordance with what is established by item 10 paragraph I of article 158 and article 322 of the CPE, COMIBOL is authorized to contract said credit with the BCB and that the Ministry of Mining and Metallurgy, through Ministerial Resolution, must justify to 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 flows will be used for the payment of the credit.

That likewise, said Law, in its article 14, provides for the extension for the 2011 management period, among others, of the validity of article 19 of Law No. 50, for which COMIBOL is released from the application of articles 33 and 35 of Law No. 2042, for the contracting and execution of concessional extraordinary credits.

That the Law of October 29, 1956, elevates to the rank of Law, Supreme Decree No. 3196 of October 2, 1952, by which COMIBOL is created as an autonomous entity with recognized legal personality.

That Law No. 3720 of July 31, 2007, establishes that COMIBOL assumes the role of applying the entire productive and operational chain for the development and diversification of the country's mining and metallurgical potential, with the purpose of increasing the national productive apparatus that will contribute, in the change from the primary export pattern to a new model, where the State participates in strategic projects that promote the productive activity of social and community organizations that guarantee the generation of jobs.

That through Supreme Decree No. 29474, COMIBOL is classified as an EPNE.

That the Regulation for the Granting of Credit to National Strategic Public Enterprises within the framework of the PGE for the 2010 and 2011 management periods, issued by the BCB, has the object of regulating the granting of credits by the BCB in favor of EPNEs within the framework of what is provided in PGE-2010, reformed by Law No. 50, and PGE-2011 approved by Law No. 62.

CONSIDERING: That through notes GERE: 0432/2011, GERE: 0520/2011, PE-0456/2011, PE-0467/2011, PE-0488/2011, and GERE: 565/2011, COMIBOL, within the framework of what is established in Law No. 62, requests the BCB to grant a credit for the execution of the project named "Integral Development of the Salar de Uyuni Brine" Industrial Plant Phase II (Production), for Bs801,050,000.- (Eight hundred one million fifty thousand 00/100 Bolivianos).

That by Ministerial Resolution No. 56, the Ministry of Mining and Metallurgy justifies to the BCB the following: 1) That according to the National Development Plan, the execution of the Project "Integral Development of the Salar de Uyuni Brine" Industrial Plant Phase II (Production) is of national priority and will be executed by COMIBOL, through the National Management of Evaporitic Resources, for which a credit of Bs801,050,000.- will be requested from the BCB, financed with resources from the extraordinary credit of Bs836,400,000.-, in favor of COMIBOL, in compliance with what is provided in article 13 of Financial Law No. 62 approving the PGE-2011; 2) The technical feasibility of the execution of the Project "Integral Development of the Salar de Uyuni Brine" Industrial Plant Phase II (Production), due to having sufficient reserves, the required production capacity, the know-how, the technology, and the engineering of the project; 3) That according to the economic-financial evaluation of the Project "Integral Development of the Salar de Uyuni Brine" Industrial Plant Phase II (Production), the project's cash flow ensures the payment of the credit to be granted to COMIBOL by the BCB; and 4) That the Ministry of Mining and Metallurgy will authorize all disbursement requests to be directed to the BCB and to carry out the follow-up of the execution of the credit resources, through the General Directorate of Administrative Affairs and the General Directorate of Planning.

That through General Board Resolution No. 4539/2011, the Board of COMIBOL approves the Investment Plan of the credit resources with details of future flows that guarantee the repayment of the credit, broken down into national currency expenses and foreign currency expenses.

//5. B.D. No. 052/2011 That through General Board Resolution No. 4583/2011, the Board of COMIBOL resolves to nullify the second paragraph of article two of General Board Resolution No. 4539/2011, which provided that the execution of the project was the exclusive responsibility of the persons who formulated it.

That through General Board Resolution No. 4587/2011, the Board of COMIBOL determines to approve the Disbursement Schedule of the Project "Integral Development of the Salar de Uyuni Brine" Industrial Plant Phase II (Production).

That through General Board Resolution No. 4589/2011, the Board of COMIBOL authorizes its Executive President to sign the Contract for the Granting of Extraordinary Credit under Concessional Conditions with the BCB, for the Project "Integral Development of the Salar de Uyuni Brine" Industrial Plant Phase II (Production).

That the GERE Notes: 0359/2011 and GERE: 0360/2011, through which COMIBOL puts the approval of the Investment Plan in the knowledge of the Ministry of Development Planning and the Ministry of Mining and Metallurgy.

CONSIDERING: That in merit of the credit request formulated by COMIBOL, through notes GERE: 0432/2011, GERE: 0520/2011, PE-0456/2011, PE-0467/2011, PE-0488/2011, and GERE: 565/2011, the Highest Authority of the Institution, through Act No. 22/2011 of the Ordinary Meeting of the Board of Directors of the BCB, in its second point states that the Board of the BCB took knowledge and determined to accept the credit request of COMIBOL, establishing the corresponding conditions and decided not to accept the guarantee offered by COMIBOL, determining that it proceed to request the issuance of treasury bonds to the Ministry of Economy and Public Finance (MEFP), entrusting the President of the Institution to communicate the determinations adopted.

That through Note BCB-PRES-CE-2011-415, the BCB communicates to COMIBOL that the Board of the BCB has considered its credit request and has determined to approve it under the conditions established by it; likewise, it communicates that since the guarantee offered has not been accepted, it will proceed to request the issuance of treasury bonds to the MEFP, requesting its acceptance by COMIBOL, to continue with the processing of the credit.

That through General Board Resolution of COMIBOL No. 4615/2011, the modifications to the Contract for the Granting of an extraordinary credit under concessional conditions of Bs801,050,000.- with the BCB are approved, for the execution of the Project "Integral Development of the Salar de Uyuni Brine" Industrial Plant Phase II (Production), in the conditions informed in note BCB-PRES-CE-2011-415, and ratifies the authorization to the Executive President of COMIBOL for the signing of the Contract for the Granting of Extraordinary Credit under Concessional Conditions.

That through note BCB-PRES-CE-2011-419, the BCB communicates to the Ministry of Mining and Metallurgy that its Board has considered and approved the concessional credit request made by COMIBOL, under the conditions described in note BCB-PRES-CE-2011-415. Likewise, it communicates that it has not accepted the guarantee offered by COMIBOL, corresponding to jointly request the MEFP the issuance of Treasury Bonds that will constitute the guarantee of the obligations to be contracted by COMIBOL with the BCB.

That through note BCB-PRES-CE-2011-424 and MM-366-D 0242/2011, from the BCB and the Ministry of Mining and Metallurgy, by which both institutions communicate to the MEFP that the Board of the BCB has considered and approved in favor of COMIBOL, the concessional credit request of Bs801,050,000.-, however, that it has not accepted the guarantee offered by COMIBOL, so in order to facilitate the signing of the Contract and effectuate the credit, they request to issue the list of Treasury Bonds that will constitute the guarantee of the obligations contracted by COMIBOL.

That through note GERE: 813/2011, COMIBOL requests the BCB that the loan to be granted contemplate payments with gradual (variable) amortization.

That by note MEFP/VTCP/DGCP/UEPS-0760/2011 (2175) the Ministry of Economy and Public Finance, in response to note BCB-PRES-CE-2011-424 and MM-366-D 0242/2011, attaches the list of serial numbers of the Non-Negotiable – Amortizable Treasury Bonds that said State Portfolio will deliver simultaneously with the disbursement that the BCB makes to COMIBOL as backing guarantee for the credit granted by the BCB for the execution of the project "Integral Development of the Salar de Uyuni Brine" Industrial Plant Phase II, according to the schedule to be agreed in the BCB-COMIBOL-MMM credit contract.

CONSIDERING: That through Report BCB-APEC-SSMF-INF-2011-010, the Economic Policy Advisory concludes that the credit requested by COMIBOL for the project of "Integral Development of the Salar de Uyuni Brine" Phase II of Bs801,050,000.-, forms part of the extraordinary credit of Bs836.4 million in favor of this company and is within the amounts provided in the Monetary Program of the 2011 management period, which was incorporated in the Decision of Execution of the Fiscal – Financial Program 2011 signed between the MEFP and the BCB on February 9, 2011, and approved by Board Act No. 008/11 of February 23, 2011. Likewise, they state that with respect to the credit requested by COMIBOL in the 2011 Monetary Program, the APEC informs that the disbursement of Bs801,050,000.- will not affect the fulfillment of the variables subject to measurement in said Program.

That through Report BCB-GOM-SOSP-DCE-INF-2011-4, the Monetary Operations Management (GOM) concludes that the financial conditions of the credit must be concessional within the framework of current regulations, that under the financial conditions proposed by COMIBOL and considering that the Reference Rate average of the last six months as of April 6, 2011, reaches 1.05%, the resulting degree of concessionality is 2.3% which complies with the level provided in the regulations, therefore the credit requested by COMIBOL could be granted at a rate of 0.84% with which the degree of concessionality reaches what is required.

That through Report BCB-GAL-SANO-INF-2011-125, of April 13, 2011, the Legal Affairs Management, within its competence, concludes that the request made by COMIBOL, through notes GERE: 0432/2011, GERE: 0520/2011, PE-0456/2011, PE-0467/2011, and PE-0488/2011, for the granting of a credit of Bs801,050,000.-, falls within what is provided by current regulations, to such effect, it has complied with the presentation of the documents required in article 2 of the Regulation for the Granting of Credit to National Strategic Public Enterprises within the framework of the General State Budget – Management Periods 2010 and 2011, so it corresponds to the Board of the BCB to consider the referred request by two-thirds of the votes of the members present in the meeting.

That in Act No. 022/2011 the Board of the BCB took knowledge and determined to accept the credit request of COMIBOL, establishing the corresponding conditions according to the "Table of Analysis of the Degree of Concessionality" of May 3, 2011 presented by the GOM, in which it is established that the Reference Rate average of the last six months is 1.01%, the resulting degree of concessionality is 2.3% which complies with the level provided in the regulations, therefore the credit requested by COMIBOL could be granted at a rate of 0.80%. Likewise, it decided not to accept the guarantee offered by COMIBOL, establishing that it proceed to request the issuance of Treasury Bonds to the Ministry of Economy and Public Finance (MEFP), entrusting the President of the Institution to communicate the determinations adopted.

That in virtue of what is provided in article 44 of Law No. 1670, the Board of the BCB is the competent instance to authorize the granting of the extraordinary credit in favor of COMIBOL, in order to comply with what is expressly provided in PGE-2010 and applicable legal provisions to the case.

That according to article 6 of the Regulation for the Granting of Credit to National Strategic Public Enterprises within the Framework of the General State Budget - Management 2010 and 2011, the Board of the BCB, in consideration of the technical and legal reports, will consider the credit request and, if appropriate, approve it, through the favorable vote of two-thirds of its members present at the Board meeting, issuing the corresponding Resolution; and will 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 article 41 of PGE-2010, article 13 of Law No. 62, Ministerial Resolution No. 56, and the Regulation for the Granting of Credit to National Strategic Public Enterprises within the Framework of the General State Budget - Management 2010 and 2011, the granting of a concessional extraordinary credit to COMIBOL under the following terms and conditions:

Currency: Bolivianos Total Credit Amount: Bs801,050,000.- (Eight hundred one million fifty thousand 00/100 Bolivianos) Term: 20 years Grace Period: 3 years on principal, with annual interest payments starting from the first disbursement Annual Interest Rate: 0.80% (zero point eighty percent) Guarantee: Treasury Bonds Deadline for Disbursements: Until December 30, 2012. Payment Plan: Semi-annual Installments

Article 2.- Authorize the President of the BCB to sign the contract with COMIBOL under the terms established in this Resolution.

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

La Paz, May 13, 2011

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Marcelo Zabalaga Estrada

//9. B.D. No. 052/2011

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Rolando Marín Ibáñez Hugo Antonio Dorado Araníbar

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Gustavo Blacutt Alcalá Rafael Boyán Téllez